A strong open for the stock market Tuesday saw the Dow Jones industrial average cross the 26,000 level early, but gains faded badly by the close.
After rising 1.1% early, the Dow faded to a loss of less than 0.1%. The Nasdaq composite also gave back a healthy gain, falling 0.5%, while the S&P 500 gave back nearly 0.4%. Small caps underperformed with the Russell 2000 down 1%.
Preliminary data showed volume on the NYSE and Nasdaq coming in higher than Friday’s levels in the stock market today, resulting in a distribution day for the S&P 500 and Nasdaq. Higher-volume declines haven’t been an issue for the broad market in recent weeks, but it’s always important to pay attention to signs of institutional selling when it arises, even when the percentage declines aren’t severe.
Money flowing out of stocks did not translate into bond inflows as the 10-year Treasury yield was mostly unchanged at 2.54%.
Strong showings from Merck (MRK) and UnitedHealth (UNH) helped the Dow early. Shares of Merck gapped above the 200-day moving average, rising nearly 6%, after the company said a late-stage trial of its blockbuster cancer drug Keytruda, in combination with two chemotherapy treatments, was effective in treating patients with advanced lung cancer.
Shares of UnitedHealth, meanwhile, gained 2% after the company reported earnings and gave a solid outlook for 2018.
Wall Street also liked the look of quarterly results from Citigroup (C). Shares rose 0.4% to 77.18. It tried to clear a flat base with a 78.02 entry but came up short.
Tuesday’s session served up early breakouts from many top-rated growth names including IBD 50 names Atlassian (TEAM) and Align Technology (ALGN) as well as Weibo (WB), but all three names looked a lot like the major stock indexes by the close.
Results from Atlassian are due Thursday after the close. Shares rose 0.5% to 52.82 ahead of the results. It cleared a 53.55 buy point but ended below the buy point.
Shares of Weibo rose more than 1% to 123.19. It ended just above a 122.31 cup-with-handle buy point. Note that the handle is only visible on the daily chart, not the weekly, and the latest breakout was from a late-stage base.
Align Technology also broke out early but closed with a whimper. Shares rose 2% to 263.88, closing just below a 266.51 entry.
AbbVie (ABBV) turned in a solid performance after a recent breakout over a 98.36 buy point. Shares rose another 2% to 102.46. The stock has been in the watch list at IBD Leaderboard.