The Dow Jones Industrial Average was slipping, but the Nasdaq fell hardest amid as tech stocks got walloped again. Meanwhile Microsoft (MSFT) stock was dipping amid reports former CEO and cofounder Bill Gates left the firm’s board amid a probe into a prior relationship with a staffer. The Bitcoin price was crashing again amid more tweets from Tesla (TSLA) CEO Elon Musk.
The EV stock itself gave back Friday’s gains and continues to test a key long-term technical level, the 200-day moving average.
There were some bright spots, however, with pharma giant Merck (MRK) and chemical stock Dow Inc. (DOW) the top performing blue chips. Bank stocks were also faring well once again, with Kearny Financial (KRNY) and Ameris Bancorp (ABCB) managing to pass proper buy points.
Nasdaq Beaten Lower As Tech Stocks Struggle Again
The S&P 500 was also lagging, but by a more moderate 0.5%. Discovery (DISCA) was the biggest laggard, slipping around 6% on the news it is to merge with a spin-off WarnerMedia. The deal is valued at $43 billion.
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The S&P sectors showed an almost equal amount of winners and losers. Energy and materials were leading, while technology was the biggest laggard.
Volume was slightly higher, which is not ideal on a down day. It paced 6% higher on the NYSE compared to the same time Friday. Trading was running higher by less than 1% on the Nasdaq vs. the same time on Friday.
Small caps were off session lows, with the Russell 2000 cutting its loss to around 0.1%. Growth stocks performed slightly better, with the Innovator IBD 50 ETF (FFTY) down 0.3%.
Dow Jones Slips As Merck Stock Leads
The Dow Jones Industrial Average fell back towards its 50-day line, despite being the best performing major index. It fell 0.3%, surrendering around 100 points in the process.
Merck was the top Dow component, rising around 2%. This allowed the pharma stock to retake its 200-day line. Chemical stock Dow was also faring well, gaining almost 2% as it soared out of a flat base’s buy zone. The ideal buy point was 67.37.
Walt Disney (DIS) continued to fall following its disappointing earnings report. The stock gave up almost 3%.
Microsoft Stock Dips Amid Bill Gates Revelations
Microsoft stock was another noteworthy Dow Jones laggard, giving up almost 2%. The Leaderboard member is now trading around 50-day moving average, and below a 246 buy point.
The stock is falling after the Wall Street Journal reported that board members decided founder Bill Gates had to step down from its board in 2020 while they investigated a prior romantic relationship with a female Microsoft employee. The coupling was reportedly deemed inappropriate.
A source told the Journal that board members tasked with the matter hired a law firm to conduct an investigation in late 2019. It came after an engineer submitted a letter stating she had a sexual relationship with Mr. Gates that spanned years.
Mr. Gates resigned in March last year, just three months after being re-elected to his seat. He stepped down before the investigation was finished, and before the full board formally rule on the matter.
A spokeswoman for Mr. Gates denied the matter was the reason he stepped down. She also told the WSJ the affair occurred almost 20 years ago and “ended amicably.”
Bitcoin Price Slammed On More Elon Musk Tweets
Bitcoin started falling at the weekend after Musk replied “Indeed” to a tweet from @CryptoWhale which mused about the possibility Tesla may sell their entire $1.9 billion Bitcoin stake.
Musk later posted a follow up tweet early Monday, where he said, “To clarify speculation, Tesla has not sold any Bitcoin.”
The price of Bitcoin plunged as low as $42,212 before paring losses. However it has now sunk back below $43,000, declining more than 7% according to Coindesk.
The cryptocurrency was previously spanked after a tweet from Musk where he announced his firm will no longer be accepting Bitcoin as payment for vehicles.
Meanwhile Tesla stock itself was continuing to struggle,
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
These Bank Stocks Pass Buy
Bank stocks continue to be a source of strength amid the broader negative action. In fact a couple of names managed to stage breakouts, an impressive feat.
The stock has a top notch EPS Rating of 98, and earnings have accelerated for the past two quarters.
Ameris Bancorp is also in a buy zone after rising past a cup with handle entry of 57.91. The relative strength line has been spiking of late, which is encouraging.
This stock has a very strong Composite Rating of 96, with both earnings and stock market performance impressive.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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