The Dow Jones Industrial Average sank more than 700 points as fears rose about the effects of the Covid-19 virus’s Delta variant. Growth stocks managed to outperform, which offered a crumb of comfort. Aerospace stock Boeing (BA) was the worst blue chip of the day, even as Virgin Galactic (SPCE) changed course.
AMC Entertainment (AMC) edged lower, while GameStop (GME) squeezed out a modest gain. Chip play Nvidia (NVDA) offered a buying opportunity as it made a bullish move.
Oanda senior market analyst Ed Moya said investors are getting jittery as the more contagious Delta variant of Covid-19 spreads further.
“Risk aversion is firmly in place as the Delta Covid variant spread is triggering a flight to safety as global economic concerns intensify,” he said in a research note. “Global investors are growing anxious and selling stocks, commodities and even cryptocurrencies to buy U.S. Treasuries.”
Moya said equities were due for a pullback as “Wall Street was in agreement that this is ‘as good as it gets’ for peak earnings, economic growth, monetary stimulus, and shortly fiscal support.”
He also highlighted tensions between the U.S. and China. He believes if hostilities continue to run hot then there could be panic selling of risky assets.
Covid-19 cases are rising in some countries and U.S. states, even some with high levels of vaccinations. Nearly all new cases are among people who have not been inoculated.
Nasdaq Lags As Growth Stocks Shine
The Nasdaq fared the best out of the major indexes, turning in a loss of 1.1%. Covid vaccine play Moderna (MRNA) was the top performer, gaining more than 9%. At-home fitness play Peloton (PTON) also scored, rising around 7%. Dating play Match Group (MTCH) fell hardest, dipping almost 5%, with Trip.com (TCOM) following closely behind.
TCOM shares slumped 4.5% and fell further beneath its critical 200-day moving average.
The S&P 500 fared worse, falling 1.6%. Supermarket stock Kroger (KR) fared best, rising just over 4%. Diamondback Energy (FANG) struggled in a bad day for energy stocks, giving up nearly 7%.
U.S. Stock Market Today Overview
Last Update: 4:00 PM ET 7/19/2021
The S&P sectors were all red, with consumer staples and health turning in the narrowest losses. Energy and financials were smacked down the most.
Small caps were forced lower by the rampaging bears, with the Russell 2000 dipping 1.5%.
Growth stocks managed to outperform, with the Innovator IBD 50 ETF (FFTY) closing a hair higher. This is a sliver of comfort for CAN SLIM investors.
Dow Jones Dips, Boeing Stock Dives Amid Covid Fears
The Dow Jones Industrial Average had the worst luck of the major indexes. While it closed off lows, it still gave up 2.1%.
Boeing stock fared the worst, with the Delta variant raising fears around tourism.
The stock gapped down roughly 5%, losing ground on its 50- and 200-day moving averages.
Virgin Galactic Changes Course As AMC Stock Fights
Virgin Galactic stock managed to snap a painful losing streak by posting a strong gain of 7%.
SPCE stock has a lot of ground to make up after it plunged around 39% last week. Its troubles came after the firm revealed in a regulatory filing that it plans to sell up to $500 million in stock.
This caused Virgin Galactic stock to fall hard, even though it came on the heels of the firm making its first fully crewed flight.
Some of the most noted meme stocks had mixed luck. AMC stock, which made headlines amid a big run-up, fell around 1%. Its relative strength line continues to dip.
It comes after the stock tumbled 24% last week, which was its fourth down week in a row. Despite its brutal drawback, the stock still has a perfect Relative Strength Rating of 99.
GameStop had more luck, managing to close up almost 3%. Nevertheless, IBD data shows GME stock has fallen more than 18% in the past four weeks.
Nvidia Stock Offers This Opportunity
Nvidia is offering a new buy point after making a constructive test of its 10-week moving average.
It is offering a new ideal entry point of 727.57 and is buyable up to 800.33. This bullish move increased the stock’s exposure on the prestigious IBD Leaderboard of leading growth stocks.
Nvidia was rising ahead of its stock split on Tuesday. Investors will get four shares for every one they previously owned.
The graphics-chip leader is branching out into new areas, which is a key consideration for CAN SLIM investors.
The firm is looking to make server processor chips based on technology from ARM. This puts the company on a collision course with Dow Jones stock Intel.
Nvidia, which boasts a top-class earnings track record, is making new inroads in the virtualization, data center, AI, supercomputing and automotive markets.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
YOU MIGHT ALSO LIKE:
This Is The Ultimate Warren Buffett Stock, But Should You Buy It?
Stock Of The Day Breaks Out After Earnings Crush
IBD 50 Stocks To Watch: Payments Firm Among Year’s Best IPO Stocks
Get Full Access To IBD Stock Lists And Ratings
These Are The 5 Best Stocks To Buy And Watch Now