The stock market slid in afternoon trading Thursday, causing the Dow Jones Industrial Average to close with a loss. Other indexes were left with losses as well. But a couple of managed health care stocks broke out.
XThe Dow Jones Industrial Average fell 0.6% after being up 0.8%. It was a similar story for other stock market indexes. The S&P 500 fell 0.2% but closed above 3000 and its 200-day moving average for a second day in a row.
The Nasdaq composite, up as much as 1.2%, ended 0.5% lower. Facebook (FB) fell for a third straight day after President Donald Trump signed an executive order to crack down on social media, which the president accuses of political bias. Twitter (TWTR) dropped 4.5%. It is more than 30% below prior highs and has not recovered as well as Facebook has recently.
Dow component UnitedHealth Group (UNH) broke out of a cup-with-handle base, although volume was weak. Sometimes megacap breakouts lack volume but can still work out, or heavy volume appears days after the breakout.
Shares closed mildly below the 304.10 buy point. UnitedHealth, an IBD Leaderboard pick, declined less than 40% during the coronavirus bear market. That made it a smaller correction than for most other leading stocks.
Cigna (CI), another managed care company, also broke out of a cup with handle. Cigna also closed below its buy point, this one at 202.85. Volume also was weak in Cigna's move, and both stocks have relative strength lines not quite at new highs.
After leading the market earlier in the week, small caps lagged. The Russell 2000 tumbled 2.6%. Still, the index is up about 3.5% this week, beating the S&P 500 and Nasdaq.
Stock Market Volume Lower
Volume fell on the Nasdaq and NYSE, according to preliminary figures.
Utilities, health care, materials, consumer staples and technology were the leading S&P sectors. Utilities Select Sector SPDR ETF (XLU) rose 3% for its fourth consecutive gain.
Retail, transportation and energy were the weakest sectors, despite a 3% rise in crude oil futures. U.S. crude traded at $33.80 a barrel late Thursday on signs that gasoline demand is rising.
With many stocks up more than 2%, the IBD 50 outperformed. Innovator IBD 50 ETF (FFTY) climbed 0.5%.
Workday (WDAY) led the IBD 50 with a 7.2% rise. Late Wednesday, the enterprise software company beat lowered sales and profit expectations. Shares rallied even after Workday lowered its subscription revenue guidance. The stock had just topped the 168.85 buy point of a cup-with-handle base, and gapped up on the news. The gap Thursday provides an alternative entry around 180.30.
Firearms maker American Outdoor Brands (AOBC) topped the 11.04 buy point of a lopsided base but also closed below it. Volume was more than double its average.
The company announced Wednesday it will change its name to Smith & Wesson Brands as of June 1. The name change is part of the company's planned spinoff of its outdoor products and accessories business this summer. Two independent, publicly traded companies will result: Smith & Wesson Brands, the firearms business, and American Outdoor Brands for outdoor products and accessories.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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