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The Dow Jones Industrial Average plunged nearly 800 points Monday afternoon as the market gave in to fears of property failure in China.
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The Nasdaq lost 2.7%, the S&P 500 lost 2.3% and the Dow Jones Industrials fell nearly 2.3% on the stock market today. The Nasdaq and S&P 500 fell below their 50-day lines. Small caps tracked by the Russell 2000 lagged behind, down 3.1%. Volume was mixed, lower on the NYSE and higher on the Nasdaq, compared to same time on Friday.
Among exchange-traded funds, Innovator IBD 50 (FFTY) lost 3.1%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) fell 2.4%.
The Wall Street sell-off followed Hong Kong’s Hang Seng Index, which fell 3.3% on Monday for its biggest one-day loss since July 27. The Hang Seng is down more than 27% from its January 2018 high, according to Dow Jones Market Data. The Shanghai Composite is closed Monday for the mid-autumn holidays.
Chinese stocks are struggling amid growing fears that Beijing will let real estate developer China Evergrande fail, according to the Wall Street Journal. This would result in losses for shareholders and bondholders. The iShares China Large Cap ETF (FXI) and Invesco China Technology (CQQQ) plunged more than 4% each.
Snapshot of the US Stock Market Today |
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|---|---|---|---|---|
| Index | symbol | Price | Loss of profit | % Switch |
| Dow jones | (0DJIA) | 33795.46 | -789.42 | -2.28 |
| S&P 500 | (0S & P5) | 4331.39 | -101.60 | -2.29 |
| Nasdaq | (0NDQC) | 14635.46 | -408.51 | -2.72 |
| Russel 2000 | (IWM) | 215.51 | -6.86 | -3.08 |
| MICI 50 | (FFTY) | 49.00 | -1.58 | -3.12 |
Last updated: 1:24 PM ET 9/20/2021 |
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The US economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. Most states have relaxed restrictions as vaccinations continue and cases decline. But cases are growing rapidly again, and mask warrants are returning in some states as the delta variant spreads.
Cumulative Covid-19 cases around the world have passed 229 million, with more than 4.7 million deaths, according to Worldometer. In the United States, cases are approaching 43 million with more than 692,000 deaths.
Growth stocks to watch
Steel dynamics (STLD) retreated to a loss of nearly 8% in heavy trading. The stock is sinking deeper below the 50-day moving average, a key sell signal for recent buyers.
Meanwhile, a once promising rally in steel stocks is quickly fading, with Nucor (NUE), Ternium (TX) and other industry stocks taking big losses.
Leader of the IPO Turn (RVLV) has fallen more than 6% as the stock tries to supplement the right side of a new cup base. For now, the appropriate entry point is at 74.92. In addition, an early entry at resistance near 67.80 is also in play. The first IPO title appeared in last week’s IPO Leaders article.
In IBD 50, Proximity (DOCS) plunged 11% in high volume. The stock is now 21% off its September 10 high, but remains well-extended from a buy point of 65.52 on an IPO basis. The medical software maker went public in June.
Doximity also released its 21-day exponential moving average for the first time since mid-August, when its breakout rally resumed.
Global e-Online (GLBE) and black stone (BX) sank more than 8% each, while DLocal (THE WATER), Monday.com (MNDY), Medical shock wave (SWAV) and Progress (PGNY) lost more than 5% each.
DLocal was discussed at the start of Monday’s IBD Live show on Zoom.
Nvidia (NVDA), also on the IBD 50, lost nearly 5% and was set to test its 50-day moving average. The graphics chip designer’s stock almost fully returned to its buy point of 207.43, which would trigger the round-trip sell rule if it fell at the entry. Nvidia stock is 10% of its high.
TaskUs (TASK), up 2%, was one of only two IBD 50 stocks to avoid the sale. The recent new number tries to extend its winning streak to four.
Dow Jones Movers
All 30 components of the Dow Jones were down in afternoon trading. caterpillar (CAT) was the biggest loser, down 5%. Finances were weak – American Express (AXP), Goldman Sachs (GS), JP Morgan (JPM) and Travelers (TRV) lost more than 3% each.
Apple (AAPL) and Microsoft (MSFT) dropped out over 2% each. Apple stock fell further below its 50-day moving average after breaking support last week. It is now 10% off its peak in early September.
Microsoft stock fell 2.5% to test support at its 50-day line. Shares slipped below a buy point of 305.94 on a tight three-week trend.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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