On Friday, investors were shaken by the uncertainty surrounding the announcement by FBI Director James Comey that newly discovered emails related to presidential candidate Clinton were being reviewed by the agency.
The S&P 500 Index was up 0.2% prior to the announcement and ended down 0.3%. Gold, a traditional hedge against uncertainty, rose 0.6% for the November contract, closing at $1,275.50/oz.
As noted, stocks were higher prior to the FBI announcement, chiefly due to a release by the Commerce Department that GDP had a seasonally adjusted 2.9% annual rate in Q3.
The Nasdaq Composite was the worst performer of the major indices, down 1.3%. The fall was attributed to weakness in the biotechnology sector, which was impacted by McKesson Corporation’s (NYSE:MCK) fall after management cut its profit outlook for the year. Amgen, Inc. (NASDAQ:AMGN) fell on poor sales of one of its main drugs, and the iShares Nasdaq Biotechnology Index (ETF) (NASDAQ:IBB) fell 1.88%.
At the close, the Dow Jones Industrial Average fell 8 points to close at 18,161, the S&P 500 fell 7 to 2,126, the Nasdaq lost 26 points at 5,190 and the Russell 2000 fell 26 points, closing at 1,188. The NYSE’s primary exchange traded 967 million shares with total volume of 4 billion shares. Nasdaq crossed 1.9 billion shares. On the Big Board decliners outpaced advancers by 1.5-to-1, and on Nasdaq decliners led by 1.4-to-1. NYSE blocks fell to 5,461 from 6,029 on Thursday.
For the week, the Dow Jones gained 0.1%, but the S&P 500 fell 0.7%, the Nasdaq lost 1.3% and the Russell 2000 was hit for a loss of 2.5%.
A Look at the Charts
There may be a difference in the member stocks of these two indices, but the results are remarkably the same: Both are making a serious attack on their intermediate support lines (dotted red uptrend lines), both had a significant buildup in sellers and both have a negative MACD.
However, the S&P 500 appears to have deeper support over a more compact range than the Russell 2000 fund, the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM).
Conclusion
The overall bull market is intact. However, the intermediate- and short-term trends are in doubt. In fact, the short-term support at $118 for the IWM appears to be breaking. Its next major support is at its 200-day MA at 114.
Uncertainty leads to declines. I have never, in more than 50 years of market studies, observed so much uncertainty as now.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
