Stock Market Today: Dow Down, But Alphabet, Apple Show Fortitude; Can Snap Turn Higher? | Stock News & Stock Market Analysis

Stocks slumped on Tuesday and the Dow Jones industrial average led the decline, falling more than 0.4%. The 30-component blue chip index gained 2.9% last week, its biggest weekly gain of the year.

XThe S&P 500 was off 0.4% while the Nasdaq composite squandered early gains of 0.9% to finish down 0.2%. Volume dropped on both exchanges, according to early data. Small caps got hit hard with the Russell 2000 down 1%.

Meanwhile, megacap techs Apple (AAPL) and Alphabet (GOOGL) flexed relative strength, and the 0.8% rebound in the latter is perhaps more important. Why? The parent of Google is trying stay on the north side of its fast-rising 50-day moving average and preserve at least some gains since clearing a 1,006.29 buy point in a flat base in October.

Apple was off about 0.1% at 169.64 but is maintaining an air cushion above its own 50-day line. Shares of the iPhone, iPad and Macbook giant are also still a touch extended from the proper buy zone after the stock broke out of a good cup with handle at 160.97 on Oct. 27.

Alphabet holds a solid Composite Rating of 93 on a scale of 1 to 99 on IBD Stock Checkup.

Top industry groups included a few defensive industries, including funeral services and tobacco, also rallied 0.7% or more.

Department store, ship transport, oil machinery, oil field services, metal ores, electric utility and water utility shares got pounded with declines of 1% or more. West and Southwest banks and homebuilders also fell hard.

Top homebuilder LGI Homes (LGIH) sank for a third straight session, losing 1.3% to 66.84. But shares remain firmly above the key 50-day moving average.

LGI, which specializes in homes for first-time buyers, has risen more than 90% past a 34.94 early entry in a long saucer-like base.

Miami-based homebuilding giant Lennar (LEN) dropped 1.5% to 62.06 in light turnover. Shares are still acting fine since an Oct. 3-4 breakout from a 15-week flat base with a 55.85 entry. The gain got as high as 14%.

Lennar, much like what Apple has done, is engineering a mini turnaround in profits, which fell 75% and 4% vs. year-ago levels in the first two quarters of the current fiscal year ended in November. But in the August-ended fiscal third quarter, Lennar grew earnings 5% on a 15% sales jump, and Q4 earnings are expected to accelerate, rising 10% to $1.48 a share.

Building is the top sector among the 33 tracked by IBD in its stock research tables. See the sector rankings by going to IBD Data Tables in the Stock Lists section at, then click on “Smart NYSE + Nasdaq Tables.”

Back to Apple, the megacap is outperforming the Dow Jones industrials with a 46% year-to-date return, excluding dividends. Apple, which also pays a quarterly cash dividend of 63 cents a share, has rallied nearly 49% since its breakout from a bottoming base pattern in early January.

That bottoming base was an excellent stage-one cup with handle, showing a 118.12 buy point.

Elsewhere, Snap (SNAP) jumped 10% to 14.92 in double normal turnover on a bullish note by a Barclays analyst, who noted that 2018 could mark a turnaround in fundamentals.

A turnaround, in fact, is badly needed as the Venice, Calif.-based social network is seeing huge red ink and a slowdown in user growth.

While Snap may seem like a “bargain” to some traders since shares are still 49% below the 29.44 all-time peak, keep in mind that it’s still not clear whether Snap will show the spending discipline in order to turn a profit.

Sales growth is marvelous, with the top line growing 406%, 286%, 153% and 62% in the past four quarters. But the growth rate is certainly slowing.

The company lost a combined 62 cents a share over those four total quarters and is expected to notch a net loss of 16 cents per share in Q4.


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Originally posted 2017-12-05 22:42:25.


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