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Stocks Fade In Afternoon Trading As Nasdaq Closes 2.5% Lower

The stock market weakened in the final two hours of trading Monday, as major stocks such as Tesla (TSLA), Apple (AAPL) and Microsoft (MSFT) faced new difficulties.




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Tesla is now trading below its 50-day moving average for the first time since mid-November. Tesla is rolling back its new Model Y. Apple triggered a sell signal last week and continues to fall. Microsoft gapped down but is above its 232.96 entry. All three are IBD Leaderboard stocks.

The Nasdaq composite — where megacap techs are a bigger influence — closed 2.5% lower. The S&P 500 fell 0.8% after paring losses. Both closed near session lows.

The Dow Jones Industrial Average was up 0.1% thanks to standout moves in Walt Disney (DIS), Caterpillar (CAT) and a few other Dow components. Disney jumped more than 4% on signs that its theme parks may see lessened restrictions for coronavirus.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31527.28 +32.96 +0.10
S&P 500 (0S&P5) 3877.32 -29.39 -0.75
Nasdaq (0NDQC ) 13539.27 -335.19 -2.42
Russell 2000 (IWM) 223.63 -1.56 -0.69
IBD 50 (FFTY) 47.48 -1.42 -2.90
Last Update: 4:00 PM ET 2/22/2021

Morgan Stanley (MS) cleared a flat base as financials outperformed the broad U.S. stock market. Many regional banks broke out to new highs as well, including United Bankshares (UBSI), Eastern Bankshares (EBC) and Webster Financial (WBS).

The iShares Russell 2000 small-cap ETF also faded late and closed with a 0.6% loss.

Energy, transportation and financial sectors were strongest as some cyclical areas of the market showed strength.

Airline stocks climbed after Deutsche Bank upgraded the industry to a buy rating, noting that the coronavirus and related effects are “trending in the right direction.” Analysts also believe the industry will benefit from pent-up demand for travel. IBD’s airline industry group rose more than 3%, and was among Monday’s top 15 of 197 groups.

Copa Holdings (CPA) broke out of saucer base with an 85.70 buy point. United Airlines (UAL) climbed above a 51.41 buy point in cup-without-handle base, but closed below the entry. One of its planes blew an engine after takeoff from Denver on Saturday.

A couple of airline jet leasing companies also broke out. Air Lease (AL) broke out of a flat base. The stock topped the 46.14 buy point in strong volume, and traded in buy range. The relative strength line also made a new high, bolstering the breakout. AerCap Holdings (AER) rose above the 47.41 buy point of a narrow pattern.

Industrials company Eaton (ETN) topped the 130.10 buy point of a flat base in busy trading.

Spotify (SPOT) broke out past 371.05 in a cup base but shares reversed lower. The music streaming service announced Monday that it will expand to 85 new markets in the next few days. Spotify, which is now available in 93 countries, will launch in countries across Asia, Africa, Europe and Latin America.

Solar power company Shoals Technology Group (SHLS), which was the IBD Stock Of The Day on Friday, rose above the 41.86 buy point of an IPO base. But it also reversed lower and closed below the entry.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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