Stocks showed small movement Monday, but small caps fell harder with the Russell 2000 retreating nearly 1.1%. In contrast, the S&P 500, up 3.1% last week, lost just 0.1%.
Apple (AAPL), meanwhile, fell around 0.6% to 113.30. More importantly, the stock held above its key 50-day moving average. And Intel (INTC) helped prop up chipmakers with a 0.7% gain to 35.97. Intel has been working on a new saucerlike base since peaking at 38.36 in October.
The NYSE composite outperformed by losing just 0.1%. Big Board turnover grew. The S&P 500 was also off just 0.1% while mega-cap names were virtually flat. Due to the small declines, the 500 avoided getting tagged with a new distribution day, or bout of heavy professional selling. The distribution count on the 500 is now at 2, down from 8 on Nov. 1, according to the IBD Market Pulse table found in each daily Big Picture column.
A low distribution day count implies that large funds, banks, pension plans and the like are accumulating shares on net. The Accumulation/Distribution Rating on the S&P 500 is positive at C+ as of Friday's close.
The S&P 100 was up a fraction while the Dow Jones industrials edged 0.2% ahead.
Oil and gas royalty trust, oil drilling, and international oil and gas exploration companies paced the upside with gains of 1% or more. IBD's Medical-Diversified group, which includes Dow 30 component Johnson & Johnson (JNJ), and the Internet-Network Solutions group also excelled with gains of 2% and 1%, respectively.
J&J jumped nearly 3% to 115.36 in heavy turnover, stopping short of retaking its 50- and 200-day lines. The stock is just 8% below a 52-week peak, but it's still in the early stages of forming a potential new base.
The worst declines in terms of industry groups belonged to department store chains (down more than 4%), airlines (-3%), leisure products (-3%) and steel production (off more than 2%). Southwest bank, cement and aggregate, security software and consumer loan companies also sold off hard.
Back to the tech sector, Microsoft (MSFT) rose 0.3% to 62.17, extending its gains from a breakout past a 58.80 base-on-base buy point to 5.7%. The mega cap is now slightly extended past the 5% proper buying range.
Qualcomm (QCOM), which makes the IBD Dividend Leaders screen, gave up little ground as it builds on gains since a July 21 breakaway gap past a bottoming base buy point of 56.37. Yet the stock may also be working on a new flat-base-like structure. Qualcomm was also showcased in today's The Income Investor column.
Netflix (NFLX) continues to show tight action after a strong rally last week. Down just 5 cents on Monday to 122.83, the video streaming giant is still above an aggressive entry point near 120, according to IBD Leaderboard. The standard buy point is 129.39.
In the energy sector, numerous oil and gas explorers struggled to hold big opening gains in the wake of another surprise agreement among non-OPEC oil-producing nations to join in the body's historic decision to cut overall production starting in January.
Britain's integrated oil major BP (BP) rallied more than 1% to 36.51, at one point getting as high as 36.96, or just a few cents above a 36.93 cup buy point. The eight-week cup sits within a much longer and deeper bottoming base pattern.
At one point, Halliburton pulled back below the 47 entry to an intraday low of 45.08, but that 4% drop was not enough to trigger the 8% loss-cutting sell rule following a good breakout.
Wall Street sees Halliburton reversing from a net loss of 5 cents a share in 2016 to a net profit of $1.03 a share in 2017.
The week features only a sliver of companies reporting quarterly results, but they include two major big-cap software names, Oracle (ORCL) and Adobe Systems (ADBE). The latter is expected to grow fourth-quarter profit 39% to 86 cents a share. Over the prior six quarters, earnings have grown on average 53.2%.
In August, Adobe pushed past a 100.66 flat-base entry point and rallied more than 10% before fading. Yet in its most recent correction, the stock found bullish support at the long-term 200-day moving average. Watch to see if the stock can hurdle its 50-day moving average, which would boost the odds of a fresh breakout.
Besides the upcoming Federal Reserve decision on interest rates on Wednesday, keep an eye out for the November report on producer level prices. The Econoday consensus forecast calls for a 0.2% month-to-month rise.
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