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Stock Market Dives On China Trade War Fears As Semiconductor Stocks Hit Hard | Stock News & Stock Market Analysis

The stock market ended sharply lower Thursday as attention turned away from Wednesday’s Federal Reserve policy statement to President Trump’s decision to hit China with 25% tariffs on $60 billion of Chinese goods.

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Money flowed out of stocks and into bonds as the 10-year Treasury yield slumped 6 basis points to 2.82%.

With Wall Street’s attention on a brewing trade war with China, the Dow Jones industrial index took a hit, falling 2.9%. The S&P 500 crashed 2.5% and the Nasdaq composite fell 2.4%.

The Russell 2000 small cap index gave back 2.1%. Preliminary data showed volume on the NYSE and Nasdaq coming in higher than Wednesday. The Nasdaq composite marked a mild distribution day Wednesday, falling 0.3% in higher volume. Indexes likely got hit with another distribution day Thursday.

Investors were fearful as the put/call ratio hit a lofty level of 1.17.

Caterpillar (CAT), Boeing (BA), 3M (MMM) and JPMorgan (JPM) took the biggest hits in the Dow, with losses of 4% to 6%. Elsewhere, China names NetEase (NTES) and Baidu (BIDU) fell hard in the Nasdaq 100 with losses of more than 5%.

Semiconductor stocks also lagged in the Nasdaq 100. Shares of Micron Technology (MU) fell 3.4% to 58.97 ahead of its earnings report after the close.

Shares of drugmaker AbbVie (ABBV) plunged nearly 13% after the company scrapped plans to seek accelerated approval for a lung cancer drug because the drug performed  poorly in a mid-stage trial.

There was some good news in the stock market today. Shares of IBD Sector Leader Five Below (FIVE) jumped 4% to 69.96. The retailer’s daily chart shows a cup-with-handle entry at 68.48, but an alternate handle area of 71.69 is also valid.

Five Below is also a member of both IBD Sector Leaders and the IBD 50. Headed into Thursday, the index was up nearly 10.7% year-to-date compared to a 1.4% gain for the S&P 500. Top gainers in the IBD 50 Thursday included Casa Systems (CASA) and HealthEquity (HQY) with gains of around 2%.

With an average daily dollar volume of $19.4 million, Casa Systems is on the speculative side, but it’s been a standout performer since its December IPO at 11. Shares were recently trading around 32.

MarketSmith Growth 250 name Upland Software (UPLD) also bucked the trend, rising nearly 3% to 30.05. A recent breakout over a 25.10 buy point yielded a gain of more than 20% in less than three weeks, meaning it has the potential to be a big market leader.

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