Stocks Fall In Lighter Trade; Nasdaq Breaks Support Levels

By Vincent Mao, Investor’s Business Daily

Stocks fell Friday, as ongoing worries over the fiscal cliff trumped better-than-expected data at home and overseas. Equities also ended lower on the week.

Hurt by Apple (AAPL), the Nasdaq shed 0.7% and ended below its 50-day and 200-day lines, as well as under the psychological 3000 level. The S&P 500 lost 0.4% and the Dow Jones industrial average fell 0.3%.

Volume fell across the board, according to preliminary data.

For the week, the S&P 500 fell 0.3% and the Nasdaq fell 0.2%. The Dow Jones industrial average slipped 0.1%.

Industrial production rose 1.1% in November, the Federal Reserve reported Friday, a reversal from October’s downwardly revised 0.7% decline. It was the gauge’s biggest jump in two years. Economists had projected a 0.3% gain. Auto manufacturing led the increase, surging 4.5% for the month.

Industrial capacity utilization notched up to 78.4%, above views for 78% and the highest number since July.

Big news was reported from China: The HSBC purchasing managers index climbed to 50.9 in December, its highest level in 14 months and slightly above the 50.8 reading expected by economists, according to a Bloomberg poll. November’s 50.5 reading was the PMI’s first reading above the boom-bust 50 mark in 13 months.

Among IBD 50 stocks, Sturm Ruger (RGR) tumbled 5% in heavy trading and breached its 50-day moving average. It also closed 6% below a 48.16 buy point from a fourth-stage base.

Apple gapped down and slumped 4% in fast trade after UBS and Jefferies downgraded the stock on signs that iPhone and iPad shipments will trail expectations in the March-ended quarter. Jefferies analyst Peter Misek said excess inventory has prompted Apple to cut orders to suppliers and that iPhone 5 sales got off to a slow start in their China debut Friday.

AVG Technologies (AVG) bolted 8% in massive volume, breaking out of a base with resistance around 14. The developer of network security software announced a deal with Yahoo (YHOO) late Thursday to provide the Internet pioneer with technology to scan links for security threats.

AVG’s Relative Strength line is soaring and its B+ Accumulation-Distribution Rating indicates that institutional investors are net buyers of the shares. AVG went public in February.

The Empire manufacturing index will be out Monday. There are no notable highly rated companies slated to report quarterly earnings Monday.

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