The Dow Jones Industrial Average broke a three-day win streak in afternoon trading Tuesday as blue chips at one point fell more than 200 points. Boeing stock was of no help as the Dow component continued its recent plunge. But the Nasdaq brushed off early losses and edged into positive territory by the close.
The Dow Jones index dipped 0.4% on the stock market today. Trading near 37,525, the 30-stock index is down less than 0.5% for the year after rising 13.7% in 2023. The S&P 500 kept losses tidy with a drop of less than 0.2%, while the Nasdaq composite edged up slightly to 14,857, gaining nearly 14 points. Volume ran sharply lower vs. the same time Monday on the Nasdaq and down 4% on the New York Stock Exchange, early data showed.
The Invesco QQQ Trust, which tracks the 100 largest nonfinancial companies on the Nasdaq, inched 0.2% higher.
Small caps showed a touch more weakness on Tuesday. The Russell 2000 backtracked a touch more than 1%. Meanwhile, the iShares Russell 1000 Value ETF gave back almost all of Monday's gains, losing nearly 0.6%. But iShares Russell 1000 Growth marched ahead 0.3%.
Although the major indexes sold off on the first trading week of 2024, they still reflect resilience following last year's robust rebound. In 2023, the Nasdaq gained 43.4% after losing 33.1% the prior year. The S&P 500 rallied 24.2% last year after sinking 19.4% in 2022. The Russell rose 15.1% last year.
How Dow Jones Components Did
Bucking the price-weighted decline among Dow Jones components, Salesforce and UnitedHealth were the only ones to advance 1 point or more.
Boeing, meanwhile, fell another 1.24% and hit a session low of 223.20, nearly 17% below its 2023 peak of 267.54.
The aerospace giant continued its decline after a fuselage-related bolts defect with an Alaska Airlines-operated Boeing 737 MAX 9 jet over the weekend
A Key Price Level To Watch In Boeing
Notice on a daily chart how Boeing is trying to hold the 50-day moving average, a critical level of buying support and selling resistance. Top growth stocks tend to trade above their 50-day moving averages, and lead them higher on the chart.
The 50-day line plots a stock's average closing price over the 50 most recent trading sessions.
Please check out Monday and Tuesday's IBD Live show episodes for the panel's current take on the recent stock action and whether it is at a proper buy zone or not.
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Two Biotechs Drop
Elsewhere, IBD's Stocks On The Move table revealed big drops in heavy volume by biotech firms Neogen and Cytokinetics.
Cytokinetics soared 12% on Monday on reports that Novartis is in talks to buy the developer of small molecule drugs that modulate muscle function in patients with certain conditions. CYTK stock has nearly tripled since it cleared upside resistance near 37. Shares dropped 5.6% on Tuesday.
Neogen fell more than 8% as volume ticked up more than triple its usual levels. For its fiscal second quarter, the firm reported adjusted earnings of 11 cents a share, down 27% vs. a year earlier and sharply missing analyst forecasts for 14 cents. Revenue was flat at $229.6 million.
Neogen stock had been forming a cup-like base. In December, the small cap bullishly retook its 200-day moving average. But trading near 18, it's now 25% below the base's left-side peak of 24.09. So, NEOG needs to keep working on the right side of the current pattern that could set up a potential breakout to new highs.
When a stock is at new highs, every shareholder is happy and less likely to dump shares — except for the short sellers.
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Inside The Dow Jones: JPM Analysis
The earnings season kicks off with a host of large banks that report on Friday.
JPMorgan Chase traded 0.8% lower ahead of its key earnings report expected early Friday. JPMorgan is expected to report fourth-quarter earnings of $3.46 a share, down from $3.56 a year earlier. Analysts see revenue up 12% to $39.79 billion.
JPM stock has done well since clearing a trendline entry within its recent base near 148-149 and has gained as much as 17%.
At this point, a gentle pullback — ideally in light volume — to the stock's rising 10-week moving average could generate a follow-on buy point.
JPM stock holds a best-possible 99 Composite Rating, which combines fundamental, technical and fund sponsorship metrics into a single score. IBD's Composite Rating is best used for selecting top stocks.
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