The stock market started fading at midday Thursday, as some of the market's hottest stocks sold off. The IBD 50, though, held up.
XStock indexes reversed lower, an indication that the market may be pausing to cool off some stretched advances over the past several weeks. But a bounce began at 12:45 p.m. ET that wiped away the Nasdaq's loss.
The Nasdaq composite had been up as much as 0.6% but was 0.2% higher in afternoon trading. For a time, it traded modestly lower. The S&P 500 fell 0.1%.
Stock Market Today
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31341.36 | -96.44 | -0.31 |
| S&P 500 | (0S&P5) | 3905.57 | -4.31 | -0.11 |
| Nasdaq | (0NDQC ) | 13995.64 | +23.10 | +0.17 |
| Russell 2000 | (IWM) | 225.92 | -0.96 | -0.42 |
| IBD 50 | (FFTY) | 48.59 | +0.50 | +1.04 |
Last Update: 1:36 PM ET 2/11/2021 |
||||
The Dow Jones Industrial Average was off 0.3%. Small caps underperformed for a second straight day. The Russell 2000 was down 0.7%. Still, the small-cap benchmark is a market leader, up nearly 14% so far in 2021.
Volume was lower on the NYSE and higher on the Nasdaq compared with the same time on Wednesday.
Energy, retail and transportation industry groups were in the bottom of IBD's 197 industry groups Thursday. Technology was the only S&P sector with a gain for the day, thanks mainly to strength in semiconductors. The iShares PHLX Semiconductor ETF (SOXX) was up 2%.
Innovator IBD 50 ETF (FFTY) showed relative strength again with a 1% gain. Most of the 50 stocks held up, with technology and building stocks leading.
Stock Market Decliners
Ligand Pharmaceuticals (LGND), however, could be topping after soaring more than 70% from its breakout a little more than three weeks ago. Shares tumbled more than 10% and are reversing lower for the week.
Digital Turbine (APPS) fell more than 3%. The stock has become overextended but its decline today seems mild in the context of the 500%-plus surge since shares started ballooning in early August.
A few other overheated stocks — including some with signs of climax tops — were falling in heavy volume.
Futu Holdings (FUTU), which soared as much as 346% in the past 5-1/2 weeks, slid 6% in intense volume. 360 FinTech (QFIN), a 52% gainer since rising to new highs Feb. 1, reversed modestly lower.
Cannabis stocks that had been racing higher came down sharply.
Pot Stocks Hit
Tilray (TLRY) plummeted more than 37% after soaring 185% since Feb. 3. Canopy Growth (CGC) plunged 22%, giving back gains from the past week and a half. Grow Generation (GRWG), which provides hydroponics for cultivation, dropped 13%.
Marijuana stocks have been talked up in Reddit's WallStreetBets forum, where investors have collaborated to shoot stocks higher.
Unusually strong advances characterize climax tops. One way this sell signal appears is when a stock surges 25% to 50% or even more in three weeks or less time, especially after a prolonged move from a base breakout. A gain of more than 70% above the 200-day moving average is another symptom.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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