The stock indexes gapped down Friday in a decline that broke with the pattern of mild price moves over the past couple of weeks.
The Nasdaq composite was down 0.5% and on pace to end an eight-day win streak. The S&P 500 gave up 0.6% and the Dow Jones industrial average 0.8%.
The three main indexes saw the largest declines since the technology sell-off in late July. Friday’s slide marked a change in character from earlier this month, when indexes made gains or declines that were mild.
The Russell 2000, however, was up 0.2%. Small caps tend to have less exposure to foreign markets, which helps explain their outperformance.
Volume was higher on the NYSE and flat on the Nasdaq compared with the same time Thursday. Declining stocks led advancers by a 7-to-4 ratio on the NYSE and by 6-5 on the Nasdaq.
A stock sell-off in Europe spread to Wall Street, after tensions heated up between the U.S. and Turkey over Turkey’s detention of an American pastor. President Trump ordered some tariffs on Turkish steel and aluminum to be doubled. The move worsened Turkey’s financial troubles.
Turkey’s currency plunged to a record low Friday. European central banks warned of trouble for some banks with heavy exposure to Turkey. Worries of contagion hit the major European markets. The London FTSE 100 tumbled 1%, the German DAX 2%, and France’s CAC 40, 1.6%.
The iShares MSCI Turkey Investable ETF (TUR) plummeted 15% to the lowest level since March 2009. The ETF already had been in decline since March of this year.
Impressively, leading stocks performed way better than the broad market. The Innovator IBD 50 Fund (FFTY) was up 1.8% and rising back above its 50-day line.
Thirty-three of the IBD 50 stocks were higher, a broad show of force for the leaders. But the main reason for the IBD 50’s success rested on a single stock: Trade Desk (TTD).
The online advertising platform soared 36% to a record high, gapping well above its 50-day moving average. Trade Desk beat second-quarter profit and revenue expectations. The company added more large clients and its sales forecast for the current quarter was above views.
Also in the IBD 50, Copart (CPRT) stood out as shares rose above the 60.53 buy point of a flat base. But volume was three-quarters less than average. The auto-auction operator was featured in IBD 50 Stocks To Watch this week.
On Wall Street, the major stock moves were mostly because of earnings reports. Altair Engineering (ALTR) broke out of a cup with handle base, clearing the 37.31 buy point in heavy volume. The engineering software company, which went public in November, beat profit expectations.
