Stocks Lower, But Medicals Climb; Chipotle Tumbles – Investor's Business Daily

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XAutoplay: On | OffStocks were broadly lower Tuesday afternoon, but biotechs led a rally in health care stocks.

The Nasdaq and S&P 500 were off 0.4% and the Dow Jones industrial average eased 0.1%.

Pharmaceuticals Merck (MRK) and Pfizer (PFE) led the Dow as drugmakers and some other health care stocks led the market. Merck added 2% and Pfizer climbed 1%, adding space above its conjoined 50-day and 200-day moving averages.

Small caps lagged, with the Russell 2000 off 0.9%. The Dow transports fared even worse, down 1.4%.

Volume was tracking higher across the board in the stock market today. Losers led winners by a 5-to-2 ratio on the NYSE and by a 2-to-1 ratio on the Nasdaq.

The energy sector was weakest after oil prices sank to a seven-month low, to $43.29 a barrel.

Chipotle Mexican Grill (CMG) plunged 6.5% in more than five times its average volume. Shares, which already had tumbled below the 50-day moving average, almost touched the 200-day line at the session low. The fast-casual restaurant chain gave an update on operations and outlook that caused investors to doubt that its recovery is on track.

Teladoc (TDOC) fell 6% in big volume as it came down from a record high. But the stock remains in a sharp upward trend. Late Monday, the company announced it is acquiring Best Doctors, a provider of consultations for patients with complex medical conditions, for $375 million in cash and $65 million of Teladoc stock.

Analysts at Canaccord Genuity praised the deal, calling it an “excellent transaction for Teladoc.” Analysts said it provides cross-selling opportunities in a plethora of medical subspecialties domestically and abroad and broadens the company’s offering into low-volume, high-acuity cases. “Furthermore, this transaction will differentiate Teladoc from its peers,” the analysts said.

Nvidia (NVDA) and Amazon.com (AMZN) saw unusually heavy trading as those major stocks climbed but pared gains.

Nvidia held on to a small price increase that left shares near a new high. Pacific Crest upgraded the stock to sector weight from underweight.

Amazon was up a fraction despite volume on track for a 40% increase over its average. The stock, a member of IBD Leaderboard, is extended after rising from support at the 50-day moving average.

Ulta Beauty (ULTA) also saw a big burst in volume and a small price increase of less than 1%. Yet, the cosmetics retailer is finding support after pulling back to the 50-day moving average for the second time since its May breakout.

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