On Thursday, buyers drove the Dow Jones Industrial Average to its 10th consecutive record close, but the other major indices didn’t keep pace with the blue-chip stocks. The Nasdaq fell 0.4% under selling pressure from the biotechnology sector. The S&P 500 closed pretty much unchanged, and small-caps took a hit as indicated by a decline of more than 0.6% in the Russell 2000.
Nevertheless, the Nasdaq has gained over 8% this year, outperforming the Dow and the S&P 500, which have gained about 5%. But yesterday the mid-cap index couldn’t hold its own against declines in biotechnology and technology shares. The iShares Nasdaq Biotechnology Index (ETF) (NASDAQ:IBB) fell 0.3%. Intercept Pharmaceuticals Inc (NASDAQ:ICPT) lost 5.6%, and Nvidia Corporation (NASDAQ:NVDA) led the semiconductor group lower by falling 9.3%. However, the loss was partially offset by a gain of 8.6% in HP Inc (NYSE:HPQ).
But gains in crude oil prices helped lift the energy sector by 0.5%, thus avoiding a loss in the S&P 500. Crude oil (WTI) jumped 1.6% with a closing fix at $54.45/bbl.
At the close the Dow Jones Industrial Average gained 35 points at 20,810, the S&P 500 gained one point to close at 2,364, the Nasdaq fell 25 points, closing at 5,836, and the Russell 2000 lost 9 points at 1,395. The NYSE’s primary exchange traded 825 million shares with total volume of 3.5 billion shares, and the Nasdaq crossed 1.9 billion shares. On the Big Board, decliners outpaced advancers by 1.3-to-1, and on the Nasdaq, decliners led by 1.5-to-1. Blocks on the NYSE increased to 6,307 from 6,283 on Wednesday.
It took 30 years to break the ten straight record closes streak, and it just managed to pull it off. In addition, until Wednesday the big-cap index had never closed 2,000 points above its 200-day moving average. Yesterday’s momentum carried it to a spread of 2,091 points above that major support line.
Conclusion: With the Dow Jones on a sharp incline, and as noted, trading over 2,000 points above its 200-day moving average, and the S&P 500 at about 22 times trailing 12-months earnings, buyers, with good reason, appear to be more wary of making new commitments.
All trends are positive, with near-, intermediate- and long-term trends poised to move higher. But nothing rises forever, thus it is time to pocket some gains. The small- and mid-caps usually lead, but they are falling behind and that is not a favorable signal.
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.
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