The Dow Jones fought to close higher on the stock market today, as investors turned their attention to potential renewed trade tensions with China, alongside a record-setting drop in April retail sales. U.S. stocks whipsawed to close higher Friday, recovering from earlier losses.
XThe Nasdaq had pared its early losses from over 1% to closing higher 0.8% on Friday. Meanwhile, the S&P 500 and Dow Jones Industrial Average closed 0.4% and 0.3% higher, respectively. Volume was higher on both major exchanges vs. Thursday, early data showed.
The Stock Market Today
Investor's faith in the current stock market rally was truly tested this week for one of the first times since the start of the new market uptrend on April 2. From Tuesday's highs to Thursday's lows, the Nasdaq pulled back as much as 5.9%.
Meanwhile, the Dow Jones had slipped nearly 6% from its Monday open to its lows on Thursday, where it found continued support at the 50-day moving average. On Thursday, the major index briefly touched off its 50-day line at the lows of the day before rebounding.
The Dow came close but was not able to retake its key 21-day exponential moving average, which it fell below earlier this week. This key moving average has acted as support to the Dow's bullish rebound since early April.
Chip stocks, airlines and banks stocks were of the worst performers among IBD's 197 industry groups. Qualcomm (QCOM), KLA (KLAC) and Lam Research (LRCX), down 5% or more each, were among the worst performers in the Nasdaq 100 and S&P 500. The VanEck Vectors Semiconductor ETF (SMH) fell 2.3% Friday.
The Dow Jones Today
On Friday, half of the 30 Dow Jones components closed higher. Meanwhile, eight of the components fell 1% or more. Among stocks weighing heavily on the Dow today were Goldman Sachs (GS), American Express (AXP) and JP Morgan (JPM), each down 1%-2%.
Apple (AAPL) and Intel (INTC) also weighed on the Dow on Friday, as the looming threat of a trade war with China once again reappeared to hinder the market's recovery. Apple closed 0.6% lower, while Intel dropped 1.4%.
The sell-off was triggered by news that China would announce an "unreliable entity list" of technology export restrictions in response to the Trump administration's new technology export restriction which cuts U.S. chip supplies to China-based telecom company Huawei.
Apple stock remains just above a key 5% buy zone off a cup with handle base and 288.35 buy point, according to MarketSmith chart analysis. The 5% buy zone tops out at 302.66. Apple is currently an IBD Leaderboard stock and maintains an RS Rating of 93.
Elsewhere in the Dow Jones, IBD Leaderboard stock Microsoft (MSFT) drifted higher after falling back inside its 5% buy zone, where it remained until the close on Friday. Shares are trading in buy range off a double-bottom 175.10 buy point.
Microsoft shows a strong relative strength line rallying to all-time highs, while its Relative Strength Rating is 92 out of a best-possible 99.
Stocks On The Move
Among exchange traded funds, the Innovator IBD 50 (FFTY) traded up 1.7%. Meanwhile, stocks on the move today included Datadog (DDOG), Nvidia (NVDA), Atlassian (TEAM) and Dropbox (DBX), among a handful of others.
Despite weakness among chip stocks, Nvidia showed signs of strength. Shares of Nvidia rose 5.7%, reaching their 20% profit zone after breaking out of a cup-with-handle base in early April.
The chip stock reports earnings after the close on May 21. Nvidia maintains a powerful 97 Relative Strength Rating. Additionally, the company has a perfect Composite Rating of 99.
Follow Fox on Twitter at @foxonstocks for more market insight.
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Dow Jones Fights To Close Higher Amid Rising China Trade War Tension - Investor's Business Daily
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