U.S. stock indexes sagged midday Tuesday as Apple ( AAPL ) and the class A and class C shares of Alphabet ( GOOGL ) headed toward their fourth down day in a row.
[ibd-display-video id=2568535 width=50 float=left autostart=true]Alphabet’s class A shares trade under the GOOGL symbol, while the class C shares trade under the GOOG symbol. Together with Apple, the stocks account for a 19.2% weighting in the Nasdaq, according to IBD data. Trouble in these megacaps alone makes progress difficult for the Nasdaq.
Apple was down 0.6%. Alphabet A shares fell 0.3%, while C shares fell 0.4%.
Among the major indexes, the Nasdaq dropped 0.3% midday Tuesday, while the S&P 500 and the Dow Jones industrial average fell 0.3% and 0.2%, respectively. The small-cap Russell 2000 retreated 0.5%.
Volume in the stock market today was running higher on both major exchanges.
In the IBD 50, a list of the best stocks in fundamentals and technicals, gainers had a slim lead over losers. Electronics big-cap Cognex ( CGNX ) popped 2% in heavy volume, while China Lodging ( HTHT ) dropped about 3.5%.
Despite the drop, China Lodging’s chart has a constructive appearance.
China Lodging is testing its 10-week moving average line. For more than two weeks, the stock has been bobbing near the 10-week line. The midcap company will report quarterly earnings Nov. 28 at 8 p.m. ET. The Street anticipates Q3 earnings will grow 52% to 97 cents a share.
China Lodging’s earnings growth for 2017 is expected to increase 56%. In 2018, analysts see a 37% increase.
As of August, China Lodging had 3,500 hotels. The company pointed out in a presentation in August that disposable income in China is growing at an 8% pace despite the slowdown in GDP growth. The growth in income should help the hotel industry.
Last year, China Lodging’s pretax margin was 17%, the highest in at least nine years.
Blue chips were mostly down midday Tuesday. In the 30-component Dow Jones industrial average, General Electric ( GE ) fell hardest, losing 5%. GE is 44% off its high.
The National Federation of Independent Business released its optimism index for October. The survey rolled in at 103.8, which was below the consensus view for 105.
The Producer Price Index for October held steady at the prior reading of up 0.4%. Yet, that was above the consensus estimate of up 0.1% and above the highest estimate in the range. This eased concerns about low inflation. CME Group’s FedWatch Tool pegs the probability of a quarter-point rate hike at 91.5% and the chance for a half-point hike at 8.5%, when the Federal Reserve meets in December.
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