The major indexes traded near session lows Tuesday afternoon as a couple of major technology stocks, namely Apple ( AAPL ) and Microsoft ( MSFT ), dragged the sector lower.
[ibd-display-video id=3033192 width=50 float=left autostart=true] The Nasdaq composite fell 0.5% after computer hardware, solar energy and some software industry groups showed larger losses than most others. Other technology shares were down as well in today’s trading .
Apple slid 1%, falling below the 176.34 buy point of Monday’s breakout. Nomura downgraded the stock to neutral from buy and lowered its target price to 175 from 185.
“We argue that the stock’s gains for the iPhone X supercycle are in the late innings,” analyst Jeffrey Kvaal said in an email to IBD and other news organizations this morning. “We believe unit growth … is well-anticipated by consensus and a historically full multiple. … We consider now the time to downgrade; supply/demand balance for the X portends component anxiety.”
Microsoft, a big component of the Nasdaq and also a Dow component, fell more than 1% and is now below the 86.30 buy point of a flat base it had just cleared Friday.
The S&P 500 fell 0.2% while the Dow Jones industrial average lost less than 0.1%. The Russell 2000 was down 0.4%. Market volume was lower than at the same time Monday. Declining shares led advancers by a 12-7 ratio on the NYSE and by 9-to-7 on the Nasdaq.
Some interest-rate-sensitive industry groups were broadly weaker. Most of the 180 stocks in IBD’s property REIT industry group were lower. The four utility industry groups that IBD tracks were down 0.7% to 1%. The benchmark yield on the 10-year Treasury note has been trending higher since the Federal Reserve raised interest rates on Wednesday. The yield is at 2.46%, near the Oct. 25 high.
Dozens of stocks fell in busy trading, but none was more alarming than FactSet Research ( FDS ). The stock plunged below its 50-day moving average in about five times its normal volume. It was a serious break of support after FactSet had maintained a solid uptrend from its breakout on Oct. 20. A gain of more than 12% has been wiped out, causing a sell signal .
The market research and data provider missed sales estimates. Revenue for the quarter of $329.1 million was below estimates of around $331 million. Adjusted earnings were $2.04 a share, above views.
Despite the broad weakness, a few high-rated stocks broke out Tuesday.
Transportation stocks were one of the positive areas, and Navistar ( NAV ) climbed past the 45.57 buy point of a cup-without-handle base in tremendous volume. The truck manufacturer sped past expectations for its October-ended quarter. Navistar earned $1.43 a share adjusted for restructuring costs. Revenue rose 26% to $2.6 billion. A year ago, the company posted a loss.
IBD’s TAKE: Liberty Interactive QVC’s breakout looks solid, but the company’s uneven earnings contribute to a mediocre Composite Rating of 73.
Liberty Interactive QVC Group ( QVCA ) cleared a 25-week consolidation, rising past a 25.52 buy point in heavy trading.
Abbott Laboratories (ABT) rose past the 56.79 buy point of a flat base, but volume was only average. The maker of medications, nutrition products, diagnostic equipment and other medical products will announce earnings Jan. 24 before the market opens.
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