Stock market futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 edged higher late Wednesday. That followed a volatile stock market session in which the Nasdaq composite led another down day. Amazon.com (AMZN) tumbled through its 50-day moving average on fears that President Trump would target the e-commerce giant. But it was far from alone. Twenty-one stocks with Composite Ratings of 95 or above that trade at least $8 million in shares fell below their 50-days on Wednesday, including chip plays ASML Holding (ASML), Lam Research (LRCX) and NXP Semiconductor (NXPI).
These 21 stocks reflect the ongoing shift from top-rated, mostly tech names as a new stock market correction has taken hold. Splunk (SPLK), Workday (WDAY) and 58.com (WUBA) are among the top stocks dropping below their 50-day.
That action also reflects why the S&P 500 and especially the Nasdaq were under more pressure Wednesday, while the more “old economy” Dow Jones just edged lower.
The list in some ways downplays the damage that growth stocks have suffered. These 21 stocks don’t include Amazon, which has a Composite Rating of 87. They don’t include Square (SQ). Square round-tripped an early March breakout on Wednesday, but closed just above its 50-day. And they don’t include Nvidia (NVDA). Nvidia was a catalyst to Tuesday’s stock market sell-off that triggered the correction call. Nvidia crashed through its 50-day on Tuesday, tumbling nearly 8%. The chipmaker slid 1.85% on Wednesday.
Stock Market Futures
As for stock market futures overnight: The S&P 500 was indicated up fraction vs. fair value, the Dow Jones was up slightly and the Nasdaq 100 0.1% higher.
Keep in mind that overnight action doesn’t always translate into how stocks will trade in the next regular session. Stock market futures were positive Tuesday and at least mixed on Wednesday before the open.
Chips Are Big Stock Market Losers
Let’s take a look at ASML Holding, Lam Research and NXP Semiconductor. In addition to these names, Microchip Technology (MCHP), MKS Instruments (MKSI) and Analog Devices (ADI) also are among the 21 stocks. Chip plays led the stock market upswing but have been notable losers over the past several sessions.
ASML Holding, Lam Research
Chip-gear makers ASML Holding and Lam Research fell 3% on the stock market today, falling enough to invalidate recent buy points. Early Tuesday, Lam Research briefly retook a double-bottom buy point at the open, but soon reversed. ASML came within a whisker of moving back into a buy zone Tuesday before its own reversal. Those reversals, along with similar action from some other chip-gear names, were a bearish sign for leading stocks Tuesday before Nvidia (NVDA) tumbled and Facebook (FB) renewed its ongoing crash.
NXP Semiconductor Deal In Doubt
NXP Semiconductor plunged 4.3% to 116.26, crashing through its 50-day line and approaching its 200-day for the first time since Qualcomm (QCOM) agreed to buy the automotive- and wireless-chip maker in late September. Qualcomm reportedly is having trouble getting China’s approval for the NXP deal. Last month Qualcomm raised its takeover price to $127.50 a share from $110 to satisfy key NXP investors.
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