The Nasdaq composite remained down sharply as plummeting Facebook (FB) shares weighed on the index, but the Dow Jones industrial average led the stock market.
The Nasdaq was down 1.1% with a half hour left in the session. Strength in semiconductors gave the composite a bit of relief. The Philadelphia semiconductor index rallied 1.7%.
The Nasdaq composite remains higher for the week and certainly would not be down so much if it weren’t for Facebook, its fourth-largest component. In a single day, the stock lost about $150 billion of its value.
Facebook’s impact on the broad market cannot be overstated. Before Thursday’s plunge, the stock represented 4.4% of the Nasdaq and more than 2% of the S&P 500. The stock plummeted after revenue and monthly user growth for the second quarter missed expectations, and the company warned of slowing revenue growth in Q3 and Q4.
The Facebook plunge also put a dent in the IBD 50, and the stock is likely to come off that screen after today’s close. The IBD 50 was down 1.6%, although it wasn’t all Facebook’s fault.
Abiomed (ABMD) added to the IBD 50’s woes with a 12% swoon after it missed profit expectations. TAL Education (TAL) gapped below the 50-day line and touched the 200-day moving average in heavy trading. The Chinese tutoring services provider beat quarterly estimates but warned of a deceleration in revenue growth in the current quarter.
Several other IBD 50 stocks were down 1% to 4%.
The S&P 500 was down 0.3%. But the Dow added 0.5%. With Thursday’s gain, the industrials are now above their June highs. That’s a significant step.
Dow component Caterpillar (CAT) climbed 2%. The stock has been sensitive to trade conflicts, and it appears to be responding favorably to news that the U.S. and European Union reached tentative steps to scale back a trade battle.
Travelers (TRV) led the Dow with a 2.5% gain. Shares rose back above the 50-day moving average, which has been following the stock’s downward trend since April. The only serious drop on the Dow was McDonald’s (MCD), which slid more than 2% after same-store sales missed views.
Small caps also performed well, with the Russell 2000 up 0.7%. It remains a market leading index, off only about 1% from its prior high.
