Stocks Pull Back As Trade Concerns Linger

There is concern about the lack of specifics surrounding the U.S.-China trade truce

by Patrick Martin

Published on Dec 4, 2018 at 12:04 PM

The stock market is pulling back today, with the Dow Jones Industrial Average (DJI) down more than 200 points at midday. The fuzzy feeling surrounding trade talks between the U.S. and China have been replaced by skepticism that actual progress has been made. Also pressuring the blue-chip benchmark is FAANG stock Apple (AAPL), which is lower after receiving yet another analyst downgrade, this time on concerns of "market saturation." Wall Street is also keeping a close eye on the gap between the 2-year and 10-year Treasury yields, which earlier narrowed to its lowest level in 11 years.

Continue reading for more on today's market, including:

  • Analyst: This drug stock could rally another 70%.
  • Why this beer stock looks ripe for a bearish options trade.
  • Plus, SLB options traders eye January surge; Applied Materials pulls back; and Toll Brothers sinks on dismal home orders data.

Midday Market Stats Dec 4

Schlumberger Limited (NYSE:SLB) is seeing unusual options activity today, with roughly 17,000 calls on the tape -- double what's typically seen, and seven times the number of puts traded. Almost all of the action has centered at the January 2019 47.50-strike call, where it looks like new positions are being purchased. At last check, SLB was down 1.1% to trade at $45.28.  

Applied Materials, Inc. (NASDAQ:AMAT) is near the bottom of the S&P 500 today, down 4.2% to trade at $36.60, as chip stocks pull back amid renewed trade tensions between the U.S. and China. On the charts, AMAT rallied off its late-October lows near $30, but were swiftly rejected by their 80-day moving average during yesterday's sector-wide surge. Overall, the chip stock has shed 28% in 2018.

Midday Chart AMAT

Also struggling is Toll Brothers Inc (NYSE:TOL), which was down 10% at its intraday low after the homebuilder said fiscal fourth-quarter orders fell amid rising interest rates and higher home prices. TOL stock has since pared these losses to trade down 2% at $32.83, but was recently rejected by a bearish trendline, and remains 32% lower year-to-date. 

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