Dow Tumbles More Than 550 Points; Apple Sells Off On Slashed Estimates
The major stock indexes were sharply lower in today’s stock market after Apple (AAPL) warned on its Q1 earnings guidance and the ISM manufacturing index fell sharply. The Dow Jones industrials lost more than 550 points. Apple stock is a major component of the Dow Jones industrials, S&P 500 index and Nasdaq composite.
The tech-heavy Nasdaq composite dropped 2.7% in early morning trade. Meanwhile, the Dow Jones industrials and S&P 500 indexes declined 2.4% and 2.2% respectively. (For updates on this story and other market coverage, visit the Stock Market Today page.)
Dow Jones Veers Sharply Lower
The Dow Jones industrials scored a five-day win streak on Wednesday, reversing from sharp losses at the stock market open. But Apple’s earnings warning sent the Dow sharply lower early Thursday. Despite the pervasive weakness, the correcting stock market remains within a rally attempt, since it hasn’t undercut the lows set on Dec. 24 and 26.
Despite Thursday’s sell-off, investors should still be on the lookout for a follow-through day, which could happen at any time. The follow-through day gives investors the green light to begin buying stocks that are breaking out past proper buy points. But don’t be too aggressive, not all follow-through days are successful and it can take time for meaningful upside progress.
Apple Stock Tumbles To New Low
Among the Dow Jones stocks, Apple stock was the day’s loser with a near-9% decline Thursday. Late Wednesday, the iPhone maker warned that holiday-quarter sales would miss prior estimates due to weak iPhone demand, especially in China.
Major Apple supplier and Leaderboard watch list stock Broadcom (AVGO) tumbled almost 6% and is approaching its 50-day line. Shares of the chipmaker are about 9% away from a 261.69 buy point. The stock’s relative strength line hit a new high last week, a bullish technical metric that indicates significant stock market outperformance.
Stock Market M&A: Bristol-Myers Acquires Celgene
Bristol-Myers Squibb (BMY) agreed to acquire Celgene (CELG) in a cash and stock deal valued at $ 74 billion, creating a cancer drug giant.
Shares of Bristol-Myers declined 14% to hit a new 52-week low. The stock is now more than 36% off its 52-week high. Meanwhile, Celgene soared 26% to about 84.50 per share.
IBD 50 Stocks To Watch: Biotech Stock Outperforms
Among the leading growth stocks, Regeneron Pharmaceutical (REGN) was one of the few gainers with a near-1% rise in morning trade. The biotech stock is moving up the right side of a base formation after regaining its key moving average lines last week.
On the downside, Dow Jones stock Intel (INTC) snapped a five-day win streak with a nearly 4% fall. The stock is falling below its 50-day support level and is about 20% off its 52-week high.
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