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The Dow Jones Industrial Average lost more than 700 points as fears grew about the effects of the Delta variant of the Covid-19 virus. Growth stocks managed to outperform, which offered some comfort. Aeronautical stock Boeing (BA) was the worst blue chip of the day, even as Virgin Galactic (SPCE) changed course.
AMC Entertainment (AMC) fell slightly, while GameStop (GME) made a modest gain. Token set Nvidia (NVDA) offered a buying opportunity as it made a bullish move.
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Oanda’s senior market analyst Ed Moya said investors were getting nervous as the most contagious Delta variant of Covid-19 spread further.
“Risk aversion is firmly in place as the spread of the Delta Covid variant triggers a flight to safety as global economic concerns escalate,” he said in a research note. “Global investors are increasingly anxious and are selling stocks, commodities and even cryptocurrencies to buy US Treasuries.”
Moya said stocks had to take a pullback because “Wall Street agreed it was ‘as good as it gets’ for peak earnings, economic growth, monetary stimulus and soon budget support.”
He also highlighted the tensions between the United States and China. He believes that if hostilities continue to escalate, there could be panic sales of risky assets.
Covid-19 cases are on the rise in some countries and US states, even some with high levels of immunization. Almost all new cases involve people who have not been vaccinated.
Nasdaq lags as growth stocks shine
The Nasdaq is doing the best among the major indices, with a loss of 1.1%. Covid vaccine game Modern (MRNA) was the best performer, gaining over 9%. Home fitness game platoon (PTON) also scored, increasing by around 7%. Dating game Match group (MTCH) fell the hardest, plunging nearly 5%, with Trip.com (TCOM) follows closely.
TCOM shares fell 4.5% and fell further below its critical 200-day moving average.
The S&P 500 performed less well, falling 1.6%. Supermarket stocks Kroger (KR) is doing the best, increasing just over 4%. Diamondback Energy (FANG) had a bad day for energy stocks, dropping nearly 7%.
Snapshot of the US Stock Market Today |
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|---|---|---|---|---|
| Index | symbol | Price | Loss of profit | % Switch |
| Dow jones | (0DJIA) | 33948.63 | -739.22 | -2.13 |
| S&P 500 | (0S & P5) | 4257.19 | -69.97 | -1.62 |
| Nasdaq | (0NDQC) | 14267.33 | -159.91 | -1.11 |
| Russel 2000 | (Etc.) | 211.64 | -3.31 | -1.54 |
| MICI 50 | (FFTY) | 42.03 | -0.02 | -0.05 |
Last Updated: 4:00 PM ET 7/19/2021 |
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S&P sectors were all red, with consumer staples and health care posting the smallest losses. Energy and financials were the hardest hit.
Small caps were forced lower by raging bears, with the Russell 2000 dipping 1.5%.
Growth stocks managed to outperform, with the Innovator IBD 50 ETF (FFTY) closing a hair further. This is a slice of convenience for CAN SLIM investors.
Dow Jones plunges, Boeing stock plunges amid Covid fears
The Dow Jones Industrial Average has had the worst luck of the major indices. While it closed on lows, it still yielded 2.1%.
Boeing’s shares have been the worst off, with the Delta variant raising concerns about tourism.
The stock fell around 5%, losing ground on its 50 and 200-day moving averages.
Virgin Galactic changes course as AMC shares fight
Virgin Galactic shares managed to end a painful losing streak with a solid 7% gain.
SPCE stock has a lot of ground to catch up after dipping around 39% last week. Its problems arose after the company revealed in a regulatory filing that it planned to sell up to $ 500 million in shares.
This caused Virgin Galactic’s stock to drop sharply, even though it came on the heels of the company making its first full crew flight.
Some of the top rated memes stocks have had mixed luck. AMC stock, which grabbed the headlines amid a steep rise, fell about 1%. Its relative line of force continues to decline.
It comes after the stock fell 24% last week, which was its fourth consecutive week of decline. Despite its stark downside, the stock still has a perfect relative strength rating of 99.
GameStop was luckier, managing to shut down almost 3%. Nonetheless, IBD data shows that the GME stock has fallen more than 18% in the past four weeks.
Nvidia Stock offers this opportunity
Nvidia is offering a new buy point after performing a constructive test of its 10-week moving average.
It offers a new Ideal Entry Point of 727.57 and can be purchased up to 800.33. This bullish move increased the stock’s exposure to the prestigious IBD ranking of top growth stocks.
Nvidia was up ahead of its stock split on Tuesday. Investors will get four shares for each they previously owned.
The graphics chip leader is branching out into new areas, which is a key consideration for CAN SLIM investors.
The company is looking to manufacture server processor chips based on ARM technology. This puts the company on a collision course with Dow Jones Intel stock.
Leading revenue results Nvidia is making new inroads into the virtualization, data center, AI, supercomputing and automotive markets.
Please follow Michael Larkin on Twitter at @IBD_MLarkin to learn more about growth stocks and analysis.
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