The stock market gave new signs its rally is faltering Friday, although indexes came off session lows near midday.
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The Nasdaq wiped away a 1.4% early loss and was nearly unchanged after giving up a temporary gain. The index is trying to find support around the 15,000 level. It’s a new line of defense for the Nasdaq, which has already tumbled back below its 50-day moving average. The Nasdaq’s No. 2 stock, Microsoft (MSFT), fell below its 50-day line Friday.
During its early slide, the Nasdaq undercut the low of Wednesday’s follow-through, a sign this bottoming signal may fail. But the positive reversal is encouraging.
The S&P 500 lost 0.6% but bounced right as it touched its 50-day moving average. It also undercut Wednesday’s low but should close above it.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35495.43 | -402.21 | -1.12 |
| S&P 500 | (0S&P5) | 4639.06 | -29.61 | -0.63 |
| Nasdaq | (0NDQC ) | 15177.49 | -2.95 | -0.02 |
| Russell 2000 | (IWM) | 215.47 | +2.29 | +1.07 |
| IBD 50 | (FFTY) | 42.94 | +0.07 | +0.16 |
| Last Update: 11:42 AM ET 12/17/2021 | ||||
Volume was higher on the NYSE and Nasdaq compared with the same time on Thursday.
Dow Leads Stock Market Lower
The Dow Jones Industrial Average was off 1.1%. It dipped below its 50-day line.
Johnson & Johnson (JNJ) hurt the Dow with a 2.4% drop. The Centers for Disease Control and Prevention recommended Covid vaccines from the Pfizer (PFE)-BioNTech (BNTX) team and from Moderna (MRNA) over Johnson & Johnson’s.
Goldman Sachs (GS) was the biggest drag on the Dow. The investment bank fell 4%. Although shares are approaching the 200-day moving average, they are still forming a new base.
Goldman’s drop was part of a broad sell-off in financials. Financial Select Sector SPDR (XLF) was the weakest S&P sector ETF, down nearly 2% as it meets resistance at the 50-day moving average.
But in e-payments, Bottomline Technologies (EPAY) soared 15% in huge volume after the electronic payments processor agreed to a $2.6 billion buyout from investment firm Thoma Bravo. Bottomline broke out past a 49.34 buy point Dec. 10, when news came out that it was exploring a sale.
Small Caps Are Stock Market’s Best Index Today
The Russell 2000 was Friday’s best-performing major index. The small-cap benchmark erased early losses and was up 1.4%. Health care small caps led, with Invesco S&P Small Cap Health Care ETF (PSCH) up 2.5%.
Innovator IBD 50 ETF (FFTY) also made a favorable reversal. Down more than 1.5% early, the ETF was up slightly at midday. Still, it’s on track for a weekly loss of more than 5%. If the market is bottoming, you would expect the leading stocks to act much better.
Some of the poorest action in the IBD 50 was in regional banks.
Customers Bancorp (CUBI) is the latest IBD 50 stock to come under stress. Shares of the fintech company slid nearly 8% and are below the 61.58 buy point of a breakout Thursday. There is no sell signal, but today’s action is certainly bearish.
Western Alliance Bancorp (WAL) fell 4%, momentarily dropping below the 200-day moving average.
Arista, CubeSmart Near Buy Points
But Arista Networks (ANET) climbed back above the 134.24 buy point of a flat base. The breakout looked troubled Thursday, when shares reversed below the entry in heavy trading.
Also keep an eye on CubeSmart (CUBE). The self-storage company’s stock is nearing a breakout at 56.74. The relative strength line is near a new high, and the industry group is rising. CubeSmart was the IBD Stock of the Day earlier this month.
Apart from the IBD 50, Darden Restaurants (DRI) gapped down but reduced its loss to 4%. The parent of Olive Garden restaurants beat November-quarter profit views. It also said CEO Gene Lee will retire in May, and COO Rick Cardenas will replace him. Darden stock was forming a double-bottom base, but Friday’s sell-off alters the pattern.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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