The Dow Jones Industrial Average fell as Microsoft and Apple were dragged lower. The Senate voted to approve a rise in the debt ceiling following a push by Majority Leader Chuck Schumer. Meanwhile, Tesla short circuited after another stock sale by CEO Elon Musk.
While overall action was negative, logistics play Schneider National stood out by moving above an entry point. Buying stocks when the market is in a correction is not advisable, however. Also, the stock erased most gains.
Senate Approves Debt Ceiling Increase
Congress moved closer to raising the debt ceiling Tuesday after the Senate approved a $2.5 trillion debt ceiling increase in a 50-49 vote.
It is expected that the House will approve the measure and that President Joe Biden will sign the measure either late Tuesday or early Wednesday.
Schumer said earlier Tuesday they will be raising the debt limit "to a level commensurate with funding necessary to get into 2023."
It comes after the Democratic leader cut a deal with Republican counterpart Mitch McConnell that will allow the Senate to raise the debt ceiling on a one-time basis via a simple majority. This means it does not need to go through the reconciliation process.
Nasdaq Loses Key Level As Growth Stocks Get Mauled
The Nasdaq rallied off lows but still closed below the key 50-day moving average after dipping 1.1%. Peloton Interactive was one of the worst laggards after notching a 5% drop. Atlassian also struggled, sliding 4.9%.
The S&P 500 also struggled, dropping 0.7%. It did managed to hold above its 50-day line though. Adobe, Enphase Energy and ServiceNow were some of the worst laggards in that index.
U.S. Stock Market Today Overview
Last Update: 4:06 PM ET 12/14/2021
The S&P 500 sectors were mostly in the red, with only financials closing in positive territory. Technology and real estate were the worst performing areas.
Small caps were once again hit, with the Russell 2000 falling 0.8%.
But growth stocks were given the worst mauling of all by the rampaging bears. The Innovator IBD 50 ETF, a bellwether for growth stocks, skidded 1.5%.
The ETF is falling further away from the long-term 200-day moving average, which is a key technical benchmark.
Dow Jones Today: Microsoft Toils, Apple Stock Falls
The Dow Jones Industrial Average fared better than the other major indexes, closing down 0.3%. It gave up just over 100 points.
Microsoft, which had been on track for its worst day since March 2020, rallied late but still gave up 3.3%. It remains well extended past a 305.94 entry.
Salesforce.com ended up the worst performer on the Dow Jones today after falling 3.8%.
Apple stock, which has been one of the top performers of late, also suffered amid broad pressure on technology stocks. While it rallied off lows, AAPL stock closed down 0.8%.
Apple is falling after coming close to hitting its 20% profit goal from a 153.26 buy point, according to MarketSmith analysis.
Insurance play Travelers and Merck were the top Dow Jones performers. TRV closed up 2.3% while MRK rose 1.4%.
Tesla Stock Tumbles As Musk Sells More Stock
Tesla stock staged a late rally but still closed down 0.8%. It dipped after it emerged that CEO Elon Musk had sold yet more of his holdings.
Filings showed that Musk sold another 934,091 Tesla shares worth about $906.5 million. He also exercised stock options to buy 2.13 million shares of Tesla stock.
Tesla stock is now sitting below the 50-day moving average. It closed under the key benchmark Monday for the first time since June 22.
It is estimated Musk could sell as much as $18 billion worth of stock by the end of the year.
The main reason he is selling his stock is to pay off a massive tax bill as he exercises options, but his string of sales have taken a toll on the Leaderboard name.
Shares traded as high as 1,243.49 on Nov. 4. The stock currently sits almost 25% off this level.
TSLA shares remain sharply above a 764.55 buy point in a cup with handle. The EV giant is working on a new base, but it will take at least another week for this pattern to offer a buy point.
Adobe Stock Among Software Plays Under Pressure
Software stocks were being hit following a bearish note by JPMorgan software analyst Sterling Auty.
Stocks that suffered downgrades included Leaderboard stock Adobe, Cadence Design Systems and SolarWinds. The analyst downgraded those to neutral from overweight.
The likes of Cloudflare, Datadog, Doximity and Zscaler went from neutral to underweight.
Adobe was being crushed. While it was moved off lows, it closed down 6.6%. This caused it to fall back below its 50-day moving average. ADBE had been trying to make up some ground ahead of its earnings report Thursday after the close.
The other stocks named were also mauled, with DataDog falling 6.5%, Zscaler giving up 7.8% and Cadence Design Systems falling about 4.4%.
Logistics Play Tests Entry
Schneider National stood out after briefly moving past a new buy point. It now sits below its saucer-with-handle entry of 26.70 after closing down 0.3%.
This is a first-stage base. The fact these are most likely to succeed make it worth keeping an eye on.
The relative strength line has been making progress since early August, another good sign.
The stock offers a good balance of earnings and stock market performance. The trucking and logistics firm operates through three segments: truckload, intermodal and logistics.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.