The brutal sell-off in stocks today is barely giving an inch. Key equity indexes continued to trade near session lows in the final hour of trading after China pledged to slap 10% to 25% tariffs on at least $60 billion worth of U.S. imports following a meltdown in trade talks between the world’s two largest economies. The Dow Jones Industrial Average at one point fell as much as 2.8% to a session low of 25,222.
In the space of less than three weeks, the 30-stock Dow Jones has now dropped as much as 5.6% below a recent April 23 high of 26,695. That swift decline hints that a significant market correction may be underway.
The Dow Jones industrials also undercut its long-term 200-day moving average for the first time since Feb. 8.
Apple, which had made slow yet steady progress after a breakout past a first-stage cup with handle, now trades well below a 197.79 proper buy point. At one point, the iPhone, Macbook and digital services giant fell 7% below the breakout point, triggering a loss-cutting sell rule.
An 8% drop below 197.79 means that new buyers should exit the stock at 181.97. On Monday, Apple hit an intraday low of 182.85. It also gapped below its rising 50-day moving average in nearly double usual trade, a telltale sign of weak stock action.
From a broader point of view, the worst performers among the 197 industry groups tracked each day on Investors.com centered around companies that export heavily overseas. At least 27 groups dropped 4% or more, led by computer networking, specialty steel alloy, chips, semiconductor equipment, basic chemicals and automakers.
A Wide Sell-Off Beyond The Dow Jones
The Nasdaq composite fell around 3%; at one point the tech-heavy index fell to as low as 7632, marking a 6.7% drop from its new all-time high of 8176.
The S&P 500 got walloped more than 2% lower. Small caps also slid fast. The Russell 2000 lost 2.6% as crude oil fought to hold near break-even. Gold futures rallied about 1%. Kirkland Lake Gold (KL), ranked No. 3 in the IBD 50, rose more than 6% and is working on the right side of a potential new cup pattern. At 35, the stock now trades less than 5% below the cup’s left-side peak of 36.74.
The Dow Jones utility average ran 1.2% higher. At 786, the Dow utilities have rallied 10.2% since Jan. 1.
The yield on the benchmark U.S. Treasury 10-year bond slumped to as low as 2.39%, at one point going below the 2.40% yield for 3-month T-bills.
Volume is running about flat vs. the same time Friday on both exchanges. However, the final hour of each trading session tends to see an acceleration in turnover.
Top growth stocks, after soaking in huge gains in the first four months of 2019, bathed in some of the day’s biggest losses.
The Innovator IBD 50 (FFTY) slumped more than 3% to 32.43 in massive turnover. It holds a 17.4% year-to-date gain for now.
Outside The Dow Jones: These 2 Growth Stocks Brush Off The Decline
Dallas-based dating website and app firm Match (MTCH) and new IPO Beyond Meat (BYND) each rallied more than 2%, and the former rang new all-time highs. The latter is trying to engineer an initial base after its recent IPO at $25 a share.
Match reported solid Q1 results last week. Shares have risen nearly 14% past a 61.01 buy point in a flat base that shows a mild 14% correction. The 5% buy zone went up to 64.06; thus, Match is currently extended.
Read more on the fundamentals and chart action of Beyond Meat in the latest story in IBD Stock Of The Day.
Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, chart analysis, breakouts and sell signals.
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