Dow Jones Falls As Renewed US-China Tensions Pressure Stock Market – Investor's Business Daily

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Stocks were mixed Friday afternoon, ahead of the Memorial Day weekend, with the Dow Jones Industrial Average under pressure amid renewed U.S.-China tensions.

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The Dow Jones industrials pared its loss to 0.1% and the S&P 500 edged 0.1% higher, while the Nasdaq rose 0.4% in the stock market today. Small caps tracked by the Russell 2000 were down 0.2%. Volume was mixed, lower on the NYSE and higher on the Nasdaq, vs. the same time Thursday.

The recent resurgence in tech stocks has boosted the Nasdaq to a 3% year-to-date gain through Thursday’s close. The S&P 500 is down 9% year to date and the Dow is off 14%. Despite a recent advance, the Russell 2000 is 19% underwater.

The stock market has been in a confirmed uptrend since an April 2 follow-through in the S&P 500. With Thursday’s pullback, the Nasdaq is now trading around 5% away from its Feb. 19 high. Read The Big Picture for further detailed analysis on daily market action.

Covid-19 Update; Moderna In Spotlight

Worldwide coronavirus cases have topped 5.2 million, with over 335,000 deaths, according to Worldometer data tracker. In the U.S., confirmed cases are over 1.6 million as the death toll climbs past 96,000. Though the counts continue to rise, daily cases and deaths have held below their respective peaks from April 24 and April 23.

All 50 states have now begun to slowly reopen their economies or made moves to loosen some restrictions.

As the race for a treatment or cure continues, Moderna (MRNA) advanced 2.5% in heavy volume. Shares are sharply extended from any buy point and have surged more than 250% this year.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said he was “cautiously optimistic” about the biotech’s coronavirus vaccine candidate. He told NPR that Moderna’s Phase 1 trial results, released Monday, is “really quite promising.”

U.S.-China Tensions Heat Up Again

China stocks fell amid renewed tensions between the U.S. and China. The U.S. Senate earlier this week passed a bill that could lead to the delisting of China-based companies on U.S. exchanges. And, China’s new national security law to exert more control over Hong Kong sent the Hang Seng Index tumbling 5.6% and the Shanghai Composite down 1.9%.

Alibaba (BABA) dived 5% in heavy trade, even though the Chinese e-commerce giant reported better-than-expected fiscal Q4 results. Shares triggered the 7%-8% loss-cutting sell signal from a 216.20 buy point of a cup with handle.

Among other China stocks, Baidu (BIDU) sank 5%, NetEase (NTES) lost 6% and JD.com (JD) dropped 5%. NetEase and JD.com are 6% and 11% off their 52-week highs, while Baidu is nearly 30% below its high.

On the Dow Jones index, Chevron (CVX) and Exxon Mobil (XOM) were among the biggest losers, down a respective 1.4% and 2.1%. West Texas intermediate crude prices slid more than 3% to $32.81 a barrel. Chevron is 29% off its 52-week high; Exxon is 43% below.

Procter & Gamble (PG) was the only Dow stock with a more than 1% gain.

Software Stocks On The Move

Oil, airlines and department store stocks led the downside among IBD’s 197 industry groups. But software and chip stocks outperformed.

Over in the IBD 50, software leaders Box (BOX), Workday (WDAY) and ServiceNow (NOW) advanced. Workday, featured in Wednesday’s IBD 50 Stocks to Watch, is trying to break out past a 168.85 buy point of a cup with handle. But keep in mind the software maker reports earnings Wednesday after the close.

Coronavirus stocks Chegg (CHGG) and Regeneron Pharmaceuticals (REGN) were also winners, along with graphics chip designer Nvidia (NVDA).

The Innovator IBD 50 ETF (FFTY) climbed 0.5% in afternoon trading.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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