North Korea's missile testing and a sell-off in healthcare stocks weighed on indexes this week
Geopolitical developments and President Donald Trump fueled early moves in stocks this week, after
North Korea tested missiles and Trump issued a revised
travel ban and tweeted about drug pricing. As the
Dow logged its first set of back-to-back losses since January -- eventually extending its string of down days to three -- traders also digested a raft of
jobs data amid increased expectations the Fed will raise interest rates at next week's policy meeting.
Payrolls Can't Save Stocks From Weekly Losses
The week's jobs reports culminated in Friday's blowout nonfarm
payrolls, which sent stock markets higher. Nevertheless, the major U.S. benchmarks appear on track to close lower on a week-over-week basis, which would have the Dow snapping its four-week
winning streak, and the S&P 500 Index (SPX) and Nasdaq Composite (COMP) logging weekly deficits for the first time since late January.
Trump Tweet Shakes Up Drug Stocks
In addition to
Trump's tweet that he's working on a system to increase competition in the drug industry, the healthcare sector was also in focus after
House Republicans on Tuesday unveiled their plan to repeal and replace the Affordable Care Act (ACA), or Obamacare.
Put volume swelled across the sector, as
drug stocks sold off. Among one of the week's notable losers was
Valeant Pharmaceuticals Intl Inc (NYSE:VRX), which is on track to notch a roughly 11% weekly loss amid a round of refinancing and
bearish brokerage notes, including one from Morgan Stanley, which cited "company-specific
risk factors."
Biotechs, Blue-Chips Offer Prime Options Trading Opportunities
However, despite the struggles within the
biotech sector, not all hope is lost -- with EXACT Sciences Corporation (NASDAQ:EXAS) and Exelixis, Inc. (NASDAQ:EXEL) offering an appealing setup for
options traders. Our quantified data identified similar
options buying opportunities among several blue-chip stocks, too, including
Caterpillar Inc. (NYSE:CAT) -- which found technical support amid a tough week of
tax fraud allegations -- and
Apple Inc. (NASDAQ:AAPL), even as the stock lingers in overbought territory amid increased optimism from
options traders and analysts. In fact, similar quantified data helped subscribers of our Weekend Trader Series recently double their money on a Northrop Grumman Corporation (NYSE:NOC)
options trade.
Tech Shares, Mining Stocks Near Key Trendlines
Several other stocks neared key trendlines, too, suggesting breakouts could be on the horizon. As
Advanced Micro Devices, Inc. (NASDAQ:AMD) bounced back from last week's drubbing, fellow chipmaker
Micron Technology, Inc. (NASDAQ:MU) recently rebounded from its historically supportive 40-day moving average. Looking outside of the tech sphere, shares of
mining stocks Allegheny Technologies Incorporated (NYSE:ATI) and Vale SA (ADR) (NYSE:VALE) are trading near trendlines that have historically resulted in near-term bullish price action.
Retail Stocks React to Earnings
Elsewhere, the retail sector enjoyed its fair share of the limelight, amid a rush of late-season earnings reports. The action was mixed, with shares of Express, Inc. (NYSE:EXPR) tumbling more than 10% on Wednesday -- extending a streak of
negative earnings reactions -- while disappointing forecasts for
Dick's Sporting Goods Inc (NYSE:DKS) and
Zumiez Inc. (NASDAQ:ZUMZ) sent shares spiraling. Nevertheless, Wall Street newcomer
e.l.f. Beauty Inc (NYSE:ELF) flexed its muscle in the earnings confessional, as did
Sears Holdings Corp (NASDAQ:SHLD). Also on the earnings front, biotech
Cara Therapeutics Inc (NASDAQ:CARA) is down after its results, while social network stock
Momo Inc (ADR) (NASDAQ:MOMO) surged on its company's earnings beat.
Time to Buy Gold With Fed in Focus?
Looking ahead,
the Fed will dominate next week's conversation, with the Federal Open Market Committee (FOMC) set to kick off their two-day policy-setting meeting on Tuesday. The market has seemingly priced in a hike in interest rates -- expectations that appear to be reflected in gold prices, too. However, this retreat in gold could be viewed as a prime trading opportunity, with several gold stocks flashing
"buy" signals and the SPDR Gold Trust's (
GLD) recent losing streak having historically bullish implications. Additionally, as Schaeffer's Senior V.P. of Research Todd Salamone noted in this week's
Monday Morning Outlook, speculative players should "consider exposure to gold or gold-mining call options."