Stocks Rebound; Nvidia, Other Chips Stocks Weaker – Investor's Business Daily

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The stock market behaved erratically Monday, shifting direction sharply as it kept an eye on geopolitical flare ups, while weakness in chip stocks took down Nvidia (NVDA) and Intel (INTC).

Stocks erased small gains and slid suddenly around midday. News that China deployed 150,000 troops to the border with North Korea seemed to spark the selling. The Trump administration is heightening its rhetoric against North Korea’s nuclear program. But after noon ET, indexes started bouncing back.

The Nasdaq, S&P 500 and Dow Jones industrial average were up 0.2%. The Russell 2000 also was up 0.2%. Volume was lower on the NYSE compared with the same time Friday, but higher on the Nasdaq.

Steel, banking and fiber optics stocks were down the most. Steel shares fared the worst in terms of industry group performance despite news that President Trump plans to target “unfair” product dumping, a move expected to favor U.S. steel and aluminum companies. But the Wall Street Journal reported that fast steel price increases have alienated some customers.

U.S. Steel (X) was off 2% in unusually heavy volume. The stock, like many of its peers in the industry, has been trading below the 50-day moving average but may be forming a new base.

Chip manufacturers and designers were down moderately. Nvidia fell 1.6% and remains bogged down below its 50-day moving average. Intel eased 0.6% and is back down below its 50-day line. But that doesn’t take away the fact that semiconductors remain an area of strength in the market, with several top stocks forming bases or in buy areas.

The energy sector led the market today, as the price of crude oil jumped 1.2% amid instability in the Korean Peninsula. Drilling, exploration, oilfield services and integrated oil & gas stocks were up more than 1%. Even the bottom-dwelling solar energy industry group was up about 3%.

MasTec (MTZ) broke out of an odd cup-with-handle base, clearing a 41.30 buy point in active trading. But the heavy construction company fell a bit below the buy point in afternoon trading.

Domino’s Pizza (DPZ) continued to drop, shedding 0.8% after plunging nearly 6% Friday. The stock triggered a sell signal when it slid below its 50-day moving average in huge volume. A report Friday said the chain’s Q1 sales could be “well below” the consensus estimate.

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