Stocks closed sharply lower on the heels of a turbulent session Wednesday, as earnings news, inflation data and a sharp drop in oil prices combined to send tech stocks, growth stocks and small caps to one of their worst performances of the year. There were winners, with Pfizer (PFE) and BioNTech (BNTX) advancing on vaccine news.
The Nasdaq and the S&P 500 fell at the starting bell, then regained ground in morning trade. The Dow industrials traded briefly higher for the day around 10 a.m. ET. But by 10:30 action had reversed, sending all three indexes lower. The Nasdaq composite ended 1.7% lower, while the S&P 500 fell 0.8% and the Dow industrials shed 0.7%.
Trading volume was mixed, soft compared to Tuesday on the Nasdaq. It was about 10% higher on the NYSE.
The stock market will run a normal session on Thursday, while bond markets close for the Veterans Day holiday.
Pfizer Leads S&P 500; China-based Names Top Nasdaq
Pfizer clocked the strongest gain on the S&P 500, as both it and Germany-based vaccine partner BioNTech rose more than 3%. The two companies announced late Tuesday they had requested authorization from the Food and Drug Administration to approve their Covid vaccinate for all adults over 18.
At the bottom of the S&P 500, Advanced Micro Devices (AMD) crumbled 6%, unraveling more of Monday’s 10.1% rally. The IBD Leaderboard stock struggles to add a sixth week to its rally. Shares are extended after clearing a double-bottom base buy point at 114.59 in mid-October.
Oil-related names took six of the day’s 10 hardest hits on the S&P 500, as oil prices skidded almost 4% lower after weekly data showed a surprise increase in inventories. Diamondback Energy (FANG) was among those losing the most ground, down 5.2% in a move that broke below the stock’s short-term 21-day exponential moving average.
On the Nasdaq 100, DocuSign (DOCU), Mercado Libre (MELI), AMD and CrowdStrike Holdings (CRWD) were among the deepest declines. DocuSign broke below 50-day support. Mercado Libre cut back below its 50-day and 200-day moving averages. CrowdStrike dropped to test short-term support at its 10-day line, about 3% below a 289.34 buy point.
Earnings Boost DoorDash; Unity, Tesla Lead IBD 50
Earnings news produced more than a few winning stocks on Wednesday. DoorDash, RingCentral (RNG) and PDF Solutions (PDFS) roared higher after reporting results late Tuesday. SailPoint Technologies (SAIL), Avid Technology (AVID) and Sierra Wireless (SWIR) also scored big advances on earnings.
On the IBD 50 list, Unity Software (U) and Tesla (TSLA) were the day’s leaders. Unity rallied 10% in a volatile session that included an early 9% dive. The gain punched shares back above their previous high, from December, following an 11-month correction.
Tesla also had a volatile session, swinging low, then higher and ending with a 4.3% gain. That hoisted shares back above their 21-day exponential moving average, a positive signal. Shares remain extended above a 900.50 buy point in a nine-month cup base.
DoorDash rallied 10% after the food-delivery company late Tuesday reported results and said it is acquiring a Finland-based peer. The stock deal for Wolt is valued at about $8 billion. DoorDash stock is breaking out past the 220.71 buy point of a shallow double-bottom base, however shares pulled back sharply from early highs and closed below the entry.
In after-hours reporting, Dow Jones stock Disney dropped 2.7% as investors dug into its fiscal fourth-quarter results. Brooks Automation was down 2.8%. Beazer Homes was unchanged ahead of its report. Affirm Holdings spiked more than 10% in the first few minutes after reporting its fiscal first quarter results.
You can find Alan R. Elliott on Twitter @IBD_Aelliott
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