Losses steepened on the Dow Jones Industrial Average as the closing bell approached Monday, with blue chips falling more than 1,000 points. The Dow slipped below its 50-day moving average and further below the psychological level of 40,000, while both the Nasdaq and the S&P 500 also sustained huge losses on the stock market today.
The Dow Jones Industrial Average plunged 2.6% and finished the day down 1,034 points. The S&P 500 lost 3% while the Nasdaq plummeted 3.4% as both those indexes fell further below their 50-day lines. The Nasdaq was approaching its 200-day moving average but managed to find support at that level before the close.
Nvidia trimmed earlier losses but still traded 6.4% lower after reports that the artificial intelligence chip leader is delaying its next Blackwell chip due to a flaw in the design. Other Magnificent Seven companies also likely affected include Google-parent Alphabet, Microsoft and Meta Platforms. All placed orders for the new chip. Nvidia and Dow Jones component Intel led a downward charge on the Nasdaq 100 Monday.
Shares of Alphabet were also pressured after a federal ruling over its antitrust case. According to reports from The Wall Street Journal, a federal judge found that Google used methods to stifle competition in internet search. The stock dropped 4.5% Monday.
3:13 p.m. ET
All Sectors Fare Poorly In S&P
All 11 S&P sectors fell, as technology and consumer discretionary suffered the most. In the IBD MarketSurge Growth 250, Pilgrim's Pride was a big winner while Tenet Healthcare also rose. Tenet Healthcare is in a buy zone from a 142.35 buy point.
1:55 p.m. ET
Earnings from other artificial intelligence plays are due this week, with Palantir reporting after the market close and Super Micro Computer on Tuesday. Palantir is finding support at its 200-day moving average ahead of its report on the stock market today. Further, both stocks are below the 50-day moving average.
Aris Water Solutions triggered a key sell rule as it fell more than 7% from a buy point of 16.31. Napco Security Technologies has also fallen further below the 50-day moving average after closing below it on Friday.
12:14 p.m. ET
Stock Market Today: Finance, Chip Play Flash Sell Signals
Some finance stocks were among the many that triggered sell signals. Ares Capital fell below a base it was forming. Shares were already below the 50- and 200-day lines ahead of Monday's plunge. Main Street Capital fell decisively below the 50-day line after closing just below that level on Friday. Shares are more than 7% below a breakout at a 51.10 buy point.
Among chip plays, Diodes fell another 6% and further below the 200-day line on the stock market today.
10:41 a.m. ET
Services Industry Growth Stronger Than Expected
Economic data brought some relief on Monday. The Institute for Supply Management's report on activity in the services industries for July rose to 51.4 vs. views of 51, according to Econoday. A reading below 50 would indicate contraction. Traders are now betting on an 84.5% chance of a 50-basis-point rate cut in September, according to the CME FedWatch Tool.
Volume on the New York Stock Exchange and on the Nasdaq was higher on the stock market today compared with the same time on Friday. Decliners dominated the action on both exchanges.
During Friday's sell-off, the small-cap Russell 2000 held at the 50-day moving average, but the index gapped down 3.5% on Monday and broke below the 50-day line. The Innovator IBD 50 ETF suffered a 2.7% loss.
The yield on the benchmark 10-year Treasury note fell 2 basis points to 3.77%. The yield curve may finally turn into a positive slope. According to a Barron's report, stocks have risen 2.6%, 8.3% and 12% in the three-, six- and 12-month period after an inversion ended.
Dow Jones Stocks
Apple, Intel and Amazon.com were among the worst performers in the Dow.
Apple fell 6%. Warren Buffett's Berkshire Hathaway, which reported earnings on Saturday, disclosed it had sold 49.4% of its stake in Apple. The personal technology company remains the top holding in the Berkshire portfolio.
Amgen and Caterpillar will report earnings on Tuesday while Disney reports Wednesday. Amgen is trying to hold in a buy zone above a buy point of 322.60, according to IBD MarketSurge chart analysis. Disney is in a downtrend while Caterpillar has undercut its base and the 200-day moving average.
Stock Market Today
AllianceBernstein sold off, gapping down below the 50-day and 200-day moving averages and undercutting its flat base.
Packaged foods stock Kellanova gapped up 14% after The Wall Street Journal reported that Mars is in talks to acquire Kellanova. The stock also became well extended from a 63.23 buy point it topped on Friday, a day after its earnings report.
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