Dow Jones Tanks 400 Points After President Trump Calls Off Stimulus Negotiations – Investor's Business Daily

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The stock market took a turn for the worse in afternoon trading after President Trump called off stimulus negotiations on Capitol Hill until after the election. The stock market wasn’t moving much in either direction before the Trump tweet. Apple (AAPL) lagged in the Dow Jones today, down more than 2.5%. Earlier in the session, Apple set an Oct. 13 date to introduce its latest iPhone.

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The Nasdaq 100 slumped 1.5%, weighed down by weakness in Amazon.com (AMZN), Netflix (NFLX) and Tesla (TSLA).

The Russell 2000 small-cap index was the star of the day before the stimulus news, up 1.9%. The iShares Russell 2000 ETF (IWM) broke out over the 160 level was well off highs, up 0.5% in late trading.

Another bullish move for Group 1 Automotive (GPI) helped the Russell 2000. After a breakout Monday over a 98.54 buy point, Group 1 soared another 15% after the company reported strong preliminary Q3 results, announced a $200 million share buyback and reinstated its dividend.

Stocks backed off highs in the morning after Federal Reserve Chairman Jerome Powell called for additional fiscal and monetary stimulus to support the economy.

The Dow Jones industrials were down 1.1%. The stock market went back into a confirmed uptrend when the Dow Jones jumped 1.2% on Sept. 30. The Dow closed off its high, but it still qualified as a follow-through day.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 27923.98 -224.66 -0.80
S&P 500 (0S&P5) 3380.80 -27.83 -0.82
Nasdaq (0NDQC ) 11224.18 -108.30 -0.96
Russell 2000 (IWM) 158.11 +1.04 +0.66
IBD 50 (FFTY) 38.00 -0.11 -0.29
Last Update: 3:38 PM ET 10/6/2020

Boeing (BA) reversed lower in the Dow Jones today after the company cut its forecast for new aircraft and said it expects the coronavirus pandemic to hurt sales for more than a decade.

The Nasdaq composite fell  1.3% after surging 2.3% Monday. The Nasdaq showed follow-through-type price action with bullish gains on Sept. 25, Sept. 28, last Thursday and on Monday. But volume was lower on all four days. Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

The S&P 500 lost 1.2%. Volume on the NYSE and Nasdaq was higher compared with the same time Monday.

Outside the Dow Jones

Inside the MarketSmith Growth 250, recent IPO American Well (AMWL), known as Amwell, followed through powerfully after Monday’s breakout from an IPO base with a 32.09 buy point. After jumping 16% Monday, shares were up another 10.5%.

Along with Amwell, several IPOs have come to market recently that show big sales growth in recent quarters. Names like Snowflake (SNOW), GoodRx (GDRX), JFrog (FROG) and Unity Software (U) should be watched for IPO bases.

Meanwhile, Chinese real estate firm KE Holdings (BEKE) jumped 7%. The daily chart has the look of a bullish ascending base, but the pattern doesn’t show up on the weekly chart.

ETF Action

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied 1% early, helped by a bullish gain for software leader Veeva Systems (VEEV). Veeva Systems joined Leaderboard Tuesday as it forms a flat base with a 298.86 buy point. Veeva topped a 287.28 early entry Tuesday, 10 cents above its Sept. 28 high.

The iShares Expanded Tech-Software Sector ETF (IGV) pared a 1.2% intraday gain to mostly flat, while the VanEck Vectors Semiconductor ETF (SMH) reversed lower for a loss of 0.7%. Leaderboard stocks Taiwan Semiconductor (TSM) and Nvidia (NVDA) are the top two holdings of the chip ETF.


Join IBD experts as they analyze leading stocks in the stock market rally on IBD Live.


In other stock market news, Avalara (AVLR) jumped nearly 8% to 143.67. It’s trying to clear a consolidation that shows a buy point at 142.43.

Insurer Palomar (PLMR) plunged more than 15% after the company forecast heavy Q3 losses as a result of Hurricanes Hanna, Isaias, Laura and Sally. Tuesday’s gap below the 50-day moving average is an unequivocal sell signal.

Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.

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