The Dow Jones Industrial Average slipped, while the Nasdaq fell hardest as tech stocks got walloped again. Microsoft (MSFT) dipped amid reports former CEO and co-founder Bill Gates left the firm’s board amid a probe into a prior relationship with a staffer. Meanwhile, the Bitcoin price crashed again amid more tweets from Tesla (TSLA) CEO Elon Musk.
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The EV stock itself gave back Friday’s gains and continues to test a key long-term technical level, the 200-day moving average.
There were some bright spots, however, with pharma giant Merck (MRK) and chemical stock Dow Inc. (DOW) the top performing blue chips. Bank stocks were also faring well once again, with Kearny Financial (KRNY) and Ameris Bancorp (ABCB) managing to pass proper buy points.
Nasdaq Beaten Lower As Tech Stocks Struggle Again
The Nasdaq was the worst performing major index, but closed near session highs to cede 0.4%. Comcast (CMCSA) was the biggest loser, falling more than 5%, while at-home fitness stock Peloton (PTON) followed closely behind.
The S&P 500 also fell, but closed down a more moderate 0.3%. Discovery (DISCA) was among the biggest laggards, slipping 5% on the news it is to merge with WarnerMedia. The deal is valued at $43 billion.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34327.79 | -54.34 | -0.16 |
| S&P 500 | (0S&P5) | 4163.29 | -10.56 | -0.25 |
| Nasdaq | (0NDQC ) | 13379.05 | -50.93 | -0.38 |
| Russell 2000 | (IWM) | 221.32 | +0.47 | +0.21 |
| IBD 50 | (FFTY) | 44.70 | +0.08 | +0.18 |
Last Update: 4:04 PM ET 5/17/2021 |
||||
There were more losers than winners among the S&P sectors. Energy and materials were leading, while communication services ended up being the biggest laggard.
Volume was lower, which is a good sign on a down day. It fell 35% on the NYSE, according to early data. Trading was virtually flat on the Nasdaq, falling 0.2% vs. the same time on Friday.
Small caps impressed, with the Russell 2000 managing to rally out of the red and close up 0.2%. Growth stocks also fared well, with the Innovator IBD 50 ETF (FFTY) up 0.2%.
Dow Jones Slips As Merck Stock Leads
The Dow Jones Industrial Average fell back toward its 50-day line, despite being the best performing major index. However it fell less than 0.2%, losing around 50 points in the process.
Merck was the top Dow component, rising around 2%. This allowed the pharma stock to retake its 200-day line. Chemical stock Dow was also faring well, gaining 1.5% as it rose out of a flat base’s buy zone. The ideal buy point was 67.37.
Walt Disney (DIS) continued to fall following its disappointing earnings report. The stock gave up just over 2%.
Microsoft Stock Dips Amid Bill Gates Revelations
Microsoft stock was another noteworthy Dow Jones laggard, though it pared losses to close down 1.2%. The Leaderboard member is now trading around its 50-day moving average, and below a 246 buy point.
The stock is falling after the Wall Street Journal reported that board members decided founder Bill Gates had to step down from its board in 2020 while they investigated a prior romantic relationship with a female Microsoft employee. The coupling was reportedly deemed inappropriate.
A source told the Journal that board members tasked with the matter hired a law firm to conduct an investigation in late 2019. It came after an engineer submitted a letter stating she had a sexual relationship with Mr. Gates that spanned years.
Mr. Gates resigned in March last year, just three months after being reelected to his seat. He stepped down before the investigation was finished, and before the full board formally rule on the matter.
A spokeswoman for Mr. Gates denied the matter was the reason he stepped down. She also told the WSJ the affair occurred almost 20 years ago and “ended amicably.”
Bitcoin Price Slammed On More Elon Musk Tweets
Bitcoin started falling at the weekend after Musk replied “Indeed” to a tweet from @CryptoWhale which mused about the possibility Tesla may sell their entire $1.9 billion Bitcoin stake.
Musk later posted a follow up tweet early Monday, where he said, “To clarify speculation, Tesla has not sold any Bitcoin.”
The price of Bitcoin plunged as low as $42,212 before paring losses. It was trading around the $44,000 mark, falling more than 3% on its price 24 hours ago according to Coindesk.
The cryptocurrency was previously spanked after a tweet from Musk where he announced his firm will no longer be accepting Bitcoin as payment for vehicles.
The Grayscale Bitcoin Trust (GBTC) ETF was off lows, but still surrendered 10%. It is now dipping toward its 200-day moving average, while the RS line looks weak.
Meanwhile Tesla stock itself was continuing to struggle, though it closed off lows to give up just over 2% for the day. TSLA stock has dropped more than 20% in the past four weeks alone.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
These Bank Stocks Pass Buy
Bank stocks continue to be a source of strength amid the broader negative action. In fact a couple of names managed to stage breakouts, an impressive feat.
Kearny Financial broke out of a flat base with a 13.44 buy point on a weekly chart, MarketSmith analysis shows. The daily chart offers a lower handle entry of 13.
The stock has a top notch EPS Rating of 98, and earnings have accelerated for the past two quarters.
Ameris Bancorp moved into a buy zone after rising past a cup-with-handle entry of 57.91. However it reversed lower, and closed just below its buy point. The relative strength line has been spiking of late, which is encouraging.
This stock has a very strong Composite Rating of 96, with both earnings and stock market performance impressive.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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