Stock Market Indexes Fall Below Key Levels As Covid Fears Swarm Global Markets

The stock market remained sharply lower Monday at midday as Covid worries pressured indexes while the S&P 500 and Nasdaq slid below key chart levels.

X

The S&P 500, down 1.9%, gapped below its 50-day moving average in a break of that important level that resembled another one Sept. 20. The Nasdaq composite fell 1.5% and undercut its November low of 14,931.

Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, fell 1.1% and sank deeper below its 50-day moving average. Alphabet (GOOGL), Microsoft (MSFT), Tesla (TSLA) and Meta Platforms (FB) are major stocks also below the 50-day line.

The Dow Jones Industrial Average fell 2% and is at its 200-day moving average. Dow component Nike (NKE), which reports earnings after today’s close, fell 2.9% to a mid-October low. The Russell 2000 dropped 2.3% as small caps remained weak.

Volume was sharply lower compared with the same time on Friday, when quadruple witching caused a surge in trading. Declining stocks led advancers by about 5-to-1 on the Nasdaq and NYSE.

Global markets are growing more apprehensive about the omicron variant of Covid-19, which is spreading quite fast. In Europe, new measures went into effect. The Netherlands imposed a new lockdown over the weekend, and Germany set a ban on travel from the U.K. Israel set new travel restrictions. The World Economic Forum postponed its Davos conference, citing the omicron spread.

The London FTSE 100 traded 1% lower, while the German DAX sold off 1.9% and the Paris CAC 40 lost 0.8%. In Asia, the Tokyo Nikkei 225 slid 2.1%, the Hong Kong Hang Seng lost 1.9% and the Shanghai composite fell 1.1%.

Bond Prices Rise, Oil Tumbles

In another flight to safety, bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 1.39% from 1.4% late Friday. The price of U.S. crude tumbled nearly 7% to $66.04 a barrel, the lowest since Dec. 3.

Travel stocks were mixed. The U.S. Global Jets ETF (JETS), which tracks the airline industry, pared its loss to 1.5% after dropping to a 13-month low. Cruise line operators Carnival (CCL) and Royal Caribbean Group (RCL) reversed higher. Hilton Grand Vacations (HGV) stumbled 2.2% and is trying to hold above its 200-day moving average.

Moderna (MRNA) shares jumped at the open after the company said a third shot of its Covid-19 vaccine increased immune responses against omicron. But Moderna reversed lower.

Novavax (NVAX) climbed about 5% to a three-month high after European regulators recommended its Nuvaxovid vaccine for all adults. Full approval is expected soon. But Novavax also reversed lower at midday.

Pfizer (PFE), which has a Covid vaccine and a treatment under study, rose 2.3% to a new high. Share are extended from a 51.96 buy point. Pfizer was one of the few IBD 50 stocks higher.

IBD 50 Lags Stock Market

Innovator IBD 50 ETF (FFTY) sold off 2.3% and is at the lowest level since July. More breakouts are failing in the index.

Customers Bancorp (CUBI) slid more than 11% below the 61.58 buy point of last week’s breakout.

Alpha & Omega Semiconductor (AOSL) gapped below its 21-day exponential moving average in heavy trading. Homebuilders Green Brick Partners (GRBK) and Century Communities (CCS) erased gains of more than 10% from their buy points, resulting in sell signals.

All 11 S&P sectors were down, with energy, financial, transportation, industrial, consumer discretionary and materials off more than 2%.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

YOU MIGHT ALSO LIKE:

IBD’s Market Outlook: A Guide To The Different Designations

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It

IBD Live: Learn And Analyze Growth Stocks With The Pros

The post Stock Market Indexes Fall Below Key Levels As Covid Fears Swarm Global Markets appeared first on Investor’s Business Daily.