Stocks Mixed As Nasdaq Struggles But These 2 Sectors Outperform

The major indexes were mixed in afternoon trading Tuesday after the Nasdaq composite gave up gains while strength in financials and health care propped up the other main indexes.

X The Dow Jones industrial average led with a 0.7% gain and the S&P 500 added 0.3% as banking, brokerage and other financials led. Both indexes made record highs.

But the Nasdaq composite was down a fraction after surrendering small gains. Continued weakness in biotechs and chip stocks hurt the composite. The Philadelphia semiconductor index was off 0.7%.

The small-cap Russell 2000 was up 0.2%. Volume was higher compared with the same time yesterday. Advancers and decliners were practically even across the board.

Aside biotech, health care was one of today's best sectors. Dow component Johnson & Johnson (JNJ) is one to watch as the diversified medical company gets closer to a potential buy point in a six-week flat base at 144.45.

Hospitals were the No. 1 group at least for a day, following news that two nonprofit hospital companies will merge to create the nation's largest hospital chain. Outpatient care, long-term care and ethical drug industry groups were rising as well.

Chemicals also were acting well in today's market, and KMG Chemicals (KMG) broke out of a cup-with-handle base. KMG topped the 59.50 buy point in heavy volume. The maker of specialty chemicals and materials for the chip, pipeline and other industries, beat profit expectations late Monday.

Adjusted earnings were 83 cents per share, an increase of 73%, and sales rose 45% to $110.7 million. It was the first time quarterly sales topped $100 million for the Fort Worth, Texas-based company, as acquisitions start to pay off.

GlycoMimetics (GLYC) gapped out of a consolidation to a new high. The biotech reported today results from trials of a treatment for leukemia. The company is not yet profitable, though it is near its all-time high of 18.99 set in March 2014.

The IBD 50 was down about 0.2% and some of its components are still unable to climb back above the key 50-day moving average. There are some quality companies among those, including Nvidia (NVDA), Alibaba (BABA) and Applied Materials (AMAT). Prolonged trading below the line indicates a basing period is unfolding, but signs of major tops are not clear cut.

Utilities were among Tuesday's laggard, especially electric utilities. The stock most damaged was Edison International (EIX), which plunged 7% to a one-year low after the company admitted its equipment may have caused wildfires in areas served by its Southern California Edison unit. "SCE believes the investigations now include the possible role of its facilities," the company said in a statement.

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