Stocks faded in afternoon trading Wednesday, as weakness in leading stocks offset gains in the energy sector.
The Nasdaq composite reversed lower and traded with a 0.7% deficit. Semiconductors, biotechs and a large stable of Chinese stocks contributed in large part to the Nasdaq’s drop.
The S&P 500 fell 0.2% and the Dow Jones industrial average 0.1%. Small caps lagged, with the Russell 2000 down 0.9%. Selling in regional banks was one reason for the Russell’s weakness. The IBD 50 fell 0.4%, as a number of Chinese stocks found themselves at the bottom of the list.
Baozun (BZUN) fell below its 50-day moving average. The Hong Kong Hang Seng slid 1.8% overnight; the Shanghai composite fell 1.1%, deepening its bear market.
The Nasdaq composite reversed lower and traded with a 0.7% deficit. Semiconductors, biotechs and a large stable of Chinese stocks contributed in large part to the Nasdaq’s drop.
The S&P 500 fell 0.2% and the Dow Jones industrial average 0.1%. Small caps lagged, with the Russell 2000 down 0.9%. Selling in regional banks was one reason for the Russell’s weakness. The IBD 50 fell 0.4%, as a number of Chinese stocks found themselves at the bottom of the list.
Baozun (BZUN) fell below its 50-day moving average. The Hong Kong Hang Seng slid 1.8% overnight; the Shanghai composite fell 1.1%, deepening its bear market.
Volume on the NYSE and Nasdaq was higher compared with the same time Tuesday. Losers led winners by 8-to-5 on the NYSE and by 13-to-5 on the Nasdaq.
Despite the reversals, the indexes held at important levels, such as the Nasdaq’s 7500. As The Big Picture noted yesterday, the major indexes defended those key levels Tuesday in an early sign of support.
Indexes initially rose after President Trump’s move to delay investment and export restrictions, which might lessen the China trade war.
Oil prices surged Wednesday after a report showed U.S. crude output flat for another week, while stockpiles fell sharply. Brent climbed 1.9% to $77.79 per barrel. U.S. crude rose 2.5% to $72.26, adding to Tuesday’s jump.
With the energy sector setting the pace, a couple of oil stocks tried to break out.
Hess (HES) cleared the 65.99 buy point of a flat base in heavy trading. The relative strength line made a new high as well, a good sign for the breakout. Archrock (AROC) rose past the 12.50 entry of a cup with handle. But the stock fell back below the buy point and volume was unusually low.
In the electronics sector, Kemet (KEM), a fairly new stock on the IBD 50, broke out of a cup with handle base. The stock topped the 25.79 buy point in heavy volume but shares faded. The base has an awkward shape, and the relative strength line has not made a new high — two question marks. The base was abnormally deep also, featuring a 50% decline.
