The Dow Jones Industrial Average was forced lower after a judge ruled Apple (AAPL) can no longer force developers to use in-app purchasing. However, a UnitedHealth (UNH) dip had an even bigger impact. Roblox (RBLX) and Electronic Arts (EA) popped. Meme stock AMC Entertainment (AMC) also posted a whopping weekly gain.
A couple of growth stocks also managed to stage breakouts, despite the challenging action. Floor & Decor (FND) and semiconductor equipment stock KLA (KLAC) both passed buy points.
Meanwhile, Senate Democrats unveiled a plan that could have serious implications for investors if it goes ahead. They have proposed a 2% excise tax on stock buybacks, which could help pay for the mooted massive increase in social-spending.
As an example, it would have cost Berkshire Hathaway (BRKB), which is run by legendary investor Warren Buffett, about $600 million tied to $30 billion in share repurchases if it had been in effect.
Nasdaq Slides As Small Caps Slip
The Nasdaq slipped despite strong performance among chip stocks. It closed down 0.9%. Peloton Interactive (PTON) fared best with a gain of almost 7%. Okta (OKTA) lagged most, falling almost 5%.
The S&P 500 also dipped lower, closing down 0.8%. United Parcel Service (UPS) was one of the better performers, rising more than 2%. Kroger (KR) was the biggest laggard, dipping more than 7% on earnings.
U.S. Stock Market Today Overview
Last Update: 4:08 PM ET 9/10/2021
S&P sectors closed mixed, with materials and energy posting the best gains. Health and utilities were the worst laggards.
Small caps also struggled, with the Russell 2000 closing down 1%.
Growth stocks were battered lower, despite a positive start. The Innovator IBD 50 ETF (FFTY) closed down 1.1%.
The Dow Jones Industrial Average reversed lower, and closed at lows after a rally attempt failed. It finished with a loss of 0.8%
Apple stock was by far the worst performer, dropping more than 3% after a judge ruled on its legal battle with “Fortnite” maker Epic Games on Friday.
While the tech giant won on nine out of 10 counts, an injunction was issued saying the firm can no longer ban developers from providing links or other communications directing users away from Apple in-app purchasing.
This is a key point, as the iPhone maker takes 15% to 30% of gross sales of such purchases.
Judge Yvonne Gonzalez Rogers did say Apple is not a monopolist and that its business success “is not illegal.”
Roblox Stock, EA Rise
Video game stocks benefited from the news, with IPO stock Roblox rising almost 2%. The stock moved further clear of its 50-day line, but remains mired in a consolidation.
Electronic Arts also rose, climbing nearly 2%. The stock powered away from its 50-day line, and moved closer to a flat-base buy point of 149.03, according to MarketSmith analysis.
While it might be closing in on a buy point technically, currently EA stock is hampered by poor overall performance.
However, Take-Two Interactive (TTWO) was punished on news of a four-month delay on new versions of its hit “Grand Theft Auto” series.
The firm said it wants to apply “further polish” to products. Take-Two stock closed down 1.9%
AMC Stock Pops
AMC stock finished the day with a gain of more than 3%, pulling further clear of its 50-day line.
However, the meme stock’s weekly performance was most impressive, rising about 14%. The stock remains up more than 2,000% since the start of 2021.
The relative strength line has turned up sharply, while upside volume has been higher over the past several week.
While AMC stock was popping, GameStop, the original meme stock, dipped more than 4%. Weekly performance was also weak here, giving up just over 6%.
It remains up more than 900% for the year so far, however.
Floor & Decor Stock Passes Buy Point
Floor & Decor stock managed to pop above a flat-base buy point of 128.60. This is a second-stage base, and such early stage patterns are more likely to succeed.
The relative strength line for FND stock hit a new high, which is a bullish sign. It boasts a perfect EPS Rating of 99, while price performance is also strong.
Floor & Decor distributes wood and tile flooring via a network of warehouse-type locations scattered over 21 states. Floor & Decor is still a young stock, as it went public in April 2017.
Semiconductor equipment stock KLA tried to break out from a cup with handle. The ideal entry point here is 356.81. However it closed under its buy zone.
The stock boasts a strong mix of fundamental and technical performance. The RS line has also been making progress of late.
Volume on its move was low however, which suggests it is a name more for a watchlist for the moment.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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