The Dow Jones Industrial Average crashed lower amid growing China fears. Leaderboard stock Nvidia (NVDA) flashed a sell signal, while Tesla (TSLA) hit the skids. Apple (AAPL) stock dipped, but industrial play Caterpillar (CAT) was the worst blue chip performer.
Global markets were spanked amid a liquidity crisis at Chinese property developer Evergrande Group. Stocks fell in Asia, Europe and the U.S. The Vix, a measure of volatility, reached its highest level since May.
Evergrande is the world’s most indebted property developer. It has obligations of more than $300 billion to creditors, and an interest payment deadline for its offshore bonds comes on Thursday. Its share price has collapsed since it warned of the risk of default last month.
“It just seems all the headlines to start the trading week are bearish,” Oanda senior market analyst Ed Moya said in a note to clients. “Evergrande’s debt fears and contagion, Chip shortage issues persist, PM Johnson is going after Amazon’s taxes, lackluster IPO performance after another record year, and as some Fed officials have begun to sell their stock amid ethics concerns.”
Nasdaq Falls As Small Caps Are Squished
Investor’s Business Daily changed its market trend to uptrend under pressure Friday, a move that proved prescient. The Nasdaq was the worst hit of the major indexes, dropping more than 3%. China e-commerce stock Pinduoduo (PDD) was the worst laggard, falling almost 8%. Fellow China stocks Baidu (BIDU) and JD.com (JD) were other big laggards.
The S&P 500 was also getting smacked lower, dropping nearly 3%. Invesco (IVZ) struggled most here, falling almost 10%. American Airlines (AAL) was a bright spot, rising about 1.5% after the White House indicated it will ease travel restrictions for international travelers.
U.S. Stock Market Today Overview
Last Update: 2:56 PM ET 9/20/2021
The S&P sectors were all negative, with utilities and real estate posting the narrowest losses. Financials and energy were lagging the most.
This weakness among financials was bad news for small caps. They struggled badly, with the Russell 2000 falling 3.4%.
Growth stocks also getting caned, with the Innovator IBD 50 ETF (FFTY) down over 4%.
Dow Jones Today: Apple Stock Dips, Caterpillar Dives
The Dow Jones Industrial Average was faring marginally better than the other major indexes, but gave up more than 900 points as it dipped nearly 3%.
Apple stock was among the losers, falling nearly 2%. It is continuing to dip after losing support at the key 50-day moving average on Friday, a key sell signal.
The tech giant has been struggling even after unveiling its new iPhone last week.
But industrial play Caterpillar was by far the biggest loser on the Dow Jones today. It gapped down below consolidation lows and was giving up more than 5%.
Merck (MRK) had been the brightest performer, but saw minor gains evaporate as it turned negative.
Nvidia Stock Flashes Sell Signal, Tesla Stock Hits Skids
Nvidia stock indicated a sell signal after giving back a minor double-digit percentage gain amid the broad bearish action.
The stock was down more than 5% midsession and is seeking support near its 50-day moving average.
The bearish move saw exposure to the chip stock cut on the prestigious IBD Leaderboard list of leading growth stocks.
Fellow Leaderboard stock Tesla was also struggling amid the broader pressure. It skidded more than 5 %.
TSLA stock has now slipped under the buy zone from an alternate entry at 730. A long, deep base is also continuing to form.
Tesla stock notched a minor gain Friday after Tesla CEO Elon musk tried to charm China by praising its automakers at its World New Energy Vehicle Congress.
These Stocks Flex Their Muscles
A few stocks managed to stand out from the crowd by seeing their relative strength lines hit 52-week highs despite the challenging conditions.
Dorchester Minerals, which is building a flat base with a 17.84 buy point, saw its RS line continue to rise.
The natural gas stock has been performing strongly over the past 12 months, and offers solid market and earnings performance.
Molina Healthcare also flexed its muscles and is near the top of a new flat base. The entry point for the California-based managed health care care stock is 283.53.
Private equity and financial services stock Carlyle Group (CG) also held its own early in the session, though it fell sharply later and the RS line ended up backing off highs. It is building a flat base with an ideal buy point of 51.65.
The stock boasts a near-perfect IBD Composite Rating of 98.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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