The stock market showed sharp losses Friday afternoon as leading growth stocks got taken to the woodshed again. Apple (AAPL) lagged badly in the Dow Jones Industrial Average despite a bullish earnings report earlier in the week. Johnson & Johnson (JNJ) also lagged in the Dow Jones today after the company said its coronavirus vaccine was 72% effective in the U.S. But it was only 66% effective in Latin America and 57% in South Africa.
Novavax (NVAX) was a coronavirus vaccine winner. Late Thursday, the company said its coronavirus vaccine is 89.3% effective in a late-stage trial in the U.K. It was 95.6% effective vs. the original coronavirus strain. Novavax gapped up to a new high, rising 63%.
The stock market moved off lows in late-afternoon, but the major stock indexes were still mired in red. The Nasdaq composite was down 1.5% in late trading, just below its 21-day exponential moving average. The 21-day line has been a consistent support level for the index since the Nasdaq’s follow-through day in early November. The S&P 500 gave back 1.6% and was holding just above its 50-day moving average. The Dow Jones Industrial Average fell below its 50-day line as it tries to make a stand at the 30,000 level. The blue-chip index gave back 1.4%.
Volume on the NYSE and Nasdaq was lower compared to the same time Thursday.
U.S. Stock Market Today Overview
Last Update: 3:32 PM ET 1/29/2021
It’s too early to say the market is headed for a correction. The distribution day count in Thursday’s Big Picture column showed the distribution day count at five for the S&P 500 and one for the Nasdaq. When distribution days start to cluster, it can spark a correction. But they’re not clustering yet. Of the S&P 500’s five distribution days, only two were indicative of meaningful institutional selling. One was on Jan. 4 when the S&P 500 plunged 1.5%. The other was on Wednesday when the index slumped 2.7%.
Dow Jones Movers
Apple stock was down 4%. Shares are down 5% so far this week even after the company on Wednesday reported double-digit revenue growth in all of its product categories on Wednesday.
Caterpillar (CAT), Honeywell (HON) and Chevron (CVX) traded lower in the Dow Jones after reporting earnings. Caterpillar is testing support at its 50-day moving average. Honeywell gave up the 200 level, while Chevron is testing its 200-day line.
Meanwhile, the speculative crazed continued in bitcoin as well as Reddit-fueled stocks like GameStop (GME) and AMC Entertainment (AMC). Bitcoin was off highs but still rallied 8% after Tesla CEO Elon Musk added #bitcoin to his Twitter profile.
After making a nice stand at its 21-day exponential moving average Thursday, Tesla (TSLA) gave up the support level Friday, falling 6%.
GameStop soared more than 100% intraday but pared its gain to 50%. AMC was also far off highs but still up 50%.
Nasdaq 100 Decliners
The Nasdaq 100 was down nearly 2%, hurt by weak performances by chip-equipment firms Applied Materials (AMAT), Lam Research (LRCX) and KLA (KLAC). Former stock market leader Zoom Video (ZM), which started selling off in October, lost another 3% as the stock continues to get resistance at its 50-day moving average.
In earnings news, Apple supplier Skyworks (SWKS) was well off highs but still rose 6%. Wall Street liked the look of a 100% surge in quarterly profit and 69% increase in revenue. Early strength in SWKS stock fueled gains for other Apple suppliers like Qorvo (QRVO) and QualcommQCOM, but early gains faded here, too. Qorvo and Qualcomm report earnings next week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) was down 2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) slumped 2.5%. The iShares Expanded Tech-Software Sector ETF (IGV) gave back 1.7% as it holds support at the 50-day line. The VanEck Vectors Semiconductor ETF (SMH) slumped 1%.
Inside the MarketSmith Growth 250, Thermo Fisher Scientific (TMO) rallied back above the 500 level as it carves a cup with handle base with a 519.10 buy point. TMO stock is an IBD Long-Term Leader. Earnings are due Monday before the open.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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