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Stocks Gains Vanish As Small Caps Reverse Lower | Stock News & Stock Market Analysis

Stock gains continued to evaporate in afternoon trading Tuesday, while the Nasdaq composite, S&P 500 and Russell 2000 small-cap index reversed lower.

X The Nasdaq composite was down 0.1% after rising nearly 1%. The S&P 500 also erased gains and was off 0.1% in the afternoon. The bearish reversals should give investors pause. The Russell 2000, which was up 0.7% early on, was down 0.3% in today’s market.

The Dow Jones industrial average led with a 0.3% gain, but it’s below the price it gapped to at today’s open. The Dow got considerable help from Merck (MRK), which catapulted to a three-month high after it reported positive results for treatments for lung cancer a year ahead of expectations.

Volume was higher compared with the same time Friday, a day of light trading ahead of the three-day weekend.

While dozens of stocks topped buy points, several surrendered gains and have lagging relative strength lines, including some in health care.

Novartis (NVS) cleared the 86.97 buy point of a flat base, but the RS line is at the lowest point in months and volume was pale. Align Technology (ALGN) poked above a 266.51 buy point but receded below the entry. The base formed after a huge advance in 2016-17.

Ligand Pharmaceuticals (LGND) tried to break out past a 149.41 buy point but the stock erased most gains. Volume was well below normal, and the RS line is lagging as well.

General Motors (GM) was trying to break out of a double-bottom base with a 45.45 entry. Volume was strong, but the RS line needs to catch up because the stock has been rangebound for much of the past four years. The automaker said 2017 earnings were at the high end of its expected range and gave bullish guidance for 2018 and 2019.

Financials Franklin Resources (BEN) and Citigroup (C) sank back into their bases after briefly clearing buy points.

Energizer Holdings (ENR) soared past the 630.17 buy point of a cup-shaped base but slid below the entry. Consumer product company Spectrum Brands (SPB) said it is selling its Global Battery and Lighting Business to Energizer Holdings for $2 billion in cash. The business includes Rayovac batteries. Spectrum Brands rose 2% after being up 5%.

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