Biotechs and megacap techs helped lead stocks moderately lower in Tuesday afternoon trading, and volume was running higher vs. Monday on both exchanges. The action suggests that institutional investors were actively taking profits.
XAutoplay: On | OffIf the Nasdaq composite, currently down nearly 0.5%, finishes at least 0.2% lower and volume climbs vs. the prior session, the leading index will have chalked up a seventh distribution day, a clearly elevated level. However, none of the six distribution days already logged in recent weeks showed a decline of 1% or more.
Read more about why the distribution count matters in IBD’s flagship daily markets analysis, The Big Picture.
At 3 p.m. ET, the Nasdaq was off as much as 0.7% before paring losses. The S&P 500, also off 0.7% in the early going, was down nearly 0.3%. Gains in telecom, food and utility shares helped offset a big slide in the oil patch and commodity stocks. U.S. oil futures at one point fell more than 2.6% but edged up to $55.73 a barrel, still down 1.8%.
The Dow Jones industrial average fell nearly 0.2%, a small drop considering at least six of the 30 components dropped 1 point or more.
Market breadth is negative in the stock market today. Losers are outpacing winners by more than a 3-2 margin on the NYSE. The NYSE’s advance-decline line has begun to slope a bit lower.
Tesla (TSLA), which is struggling to get up to speed with delivering its highly anticipated Model 3 family sedan, eased 2% to 308.67 in flat volume and gave back half of Monday’s big rebound. Investors are eager to see Thursday’s unveiling of a Tesla commercial-grade semi truck.
Tesla’s revenue rose 30% to $2.98 billion in the third quarter, but the Palo Alto, Calif., company also lost a record $2.92 a share, its biggest loss for any single quarter. Tesla, still a large cap with a $51 billion market value, has 168 million shares outstanding.
Watch to see if Tesla can rebound back above the 200-day moving average. At 309, Tesla is currently 21% below its 52-week high of 389.61. Given sharp gains since its April 2013 breakout, the current decline is reasonable enough for a potential new base, such as a cup or a double bottom, to form.
Apple (AAPL) slipped for a fourth session in a row, sinking 1.1% to 171.95. But volume was running much lighter than a normal, a good sign for those who bought at the most recent 160.97 breakout point in an eight-week cup with handle.
Broadcom (AVGO), which is reportedly seeing a rejection in its offer to buy fellow semiconductor heavyweight Qualcomm (QCOM), dropped around 1.3% in dull turnover to 261.89. Shares had jumped past a 259.46 buy point in a decent, shallow flat base.
On the downside, new IPO NCS Multistage (NCSM) got trampled by sellers, falling more than 20% to 16.16 in heavy turnover. The member of IBD’s oil and gas field services group notched a third-quarter profit of 9 cents a share vs. a 2-cent loss a year earlier and revenue of $56 million, up 95%.
Shares in the thinly traded small-cap energy play went public April 28 at 17 a share.