Stocks Fight Off Lows; Dow, Nasdaq Test Key Support Levels

Sellers were in the stock market again Monday, knocking the Nasdaq composite to an intraday loss of 2.7%, but the index pared its loss to less than 1% in late trading. The Dow Jones Industrial Average gave back 0.8%, hurt by a 4.5% sell-off in Nike stock.

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Nike (NKE) gapped below its 200-day moving average after HSBC cut its rating on Nike stock to hold from buy. Merck (MRK) outperformed in the Dow Jones today after the company announced positive data for its blockbuster cancer drug Keytruda.

Cisco Systems (CSCO) also held up well in the Dow Jones, up 0.6%. Cisco stock is finding support near its 21-day exponential moving average and is holding above the 60 level after a breakout from a base Dec. 10.

The Dow Jones industrials moved off lows as the index makes a stand at the 50-day moving average.

Outside the Dow Jones

The Invesco QQQ Trust (QQQ) fell 2.8% earlier and came close to a test of its 200-day line. But QQQ pared its loss to 0.7%.

Inside the Nasdaq 100, chip-equipment firm ASML (ASML) plunged 5% and lost support at its 200-day line. In the retail sector,  Lululemon (LULU) gapped down after the company said it expects earnings and sales for the holiday quarter to be at the low end of prior guidance. But LULU stock more than halved an early loss of nearly 9%.

Moderna (MRNA) led the way in the Nasdaq 100, up 8%, after the company updated its pipeline at the JPMorgan Healthcare Conference. The company also said it has advanced purchase agreements for product sales of about $18.5 billion this year, up from a prior report of $17 billion.

Zscaler (ZS), Intel (INTC) and Adobe (ADBE) showed gains of at least 2% in the Nasdaq 100.

BioMarin Pharmaceuticals (BMRN) was volatile after the company said its hemophilia gene therapy met primary endpoints in a two-year study.

The S&P 500 was off lows with the other major stock indexes but still fell 0.7%. Humana (HUM) also did well in the index, up more than 5%. But shares cratered 22% last week after Humana forecast disappointing Medicare Advantage membership growth.

Bristol Myers Squibb (BMY) jumped nearly 4%, helped by news of a $5 billion share buyback. It is in buy range from the 62.77 buy point of a cup with handle base.

Stock Market News

Growth stocks came under selling pressure again, with the Innovator IBD 50 ETF (FFTY) down around 2%. But Zim Integrated Shipping (ZIM) and Seagate Technology (STX) were bright spots, with gains of around 1%.

ZIM is near the top of a choppy 16-week consolidation but just below an alternate entry of 58.41. Seagate is near the top of an eight-week base.

Inside the MarketSmith Growth 250, Ciena (CIEN) made a stand at its 21-day line, rising around 1.5%. The stock’s relative strength is noteworthy at a time when most top-rated growth stocks are under serious selling pressure and violating support levels.

After soaring 26 basis points last week to around 1.77%, the 10-year Treasury yield topped the 1.80% level Monday but backed off highs to around 1.78%

After falling 5.8% earlier, the Proshares Bitcoin Strategy ETF (BITO) rallied of lows and was only down 1%.

Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.

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