Nvidia gives up gains — plus, what's behind another rough day for Danaher

Published Thu, Jun 20 20242:11 PM EDT

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks fall: The S & P 500 and Nasdaq Composite reversed into the red Thursday after touching new intraday highs earlier in the session; at its peak, the S & P 500 traded slightly above 5,500 for the first time. Dragging the stock indexes lower was a round of profit-taking in mega cap tech, artificial intelligence and many other "momentum" stocks after their big runs. Nvidia rolled over and is down almost 2%. Fellow AI chipmaker Broadcom fell by roughly 3%. Pain for Danaher: Danaher is having another rough day, falling more than 3%. It is the second time in the past five sessions the stock has dropped more than 3% in a single day — a pretty quick reversal of fortunes after setting a 52-week high of $269.11 on June 6. When it fell last week on no company-specific news, we attributed the weakness in the entire life sciences and tools industry to the lack of guidance reaffirmation from peer Repligen after it announced a CEO transition. Thursday's sell-off appears to be tied to the German bioprocessing company Sartorius, which was hammered Wednesday in overseas markets. Investors were selling Sartorius on what seems to be cautious commentary by management at a conference in Europe and skepticism by an analyst on the company's ability to hit its targets. Danaher often trades with Sartorius whenever the latter company speaks, but the linkage isn't always correct. Danaher is much better managed and has consistently guided more conservatively than its peers. The customer bases have different mixes between early-stage biotech companies and large-cap pharmaceuticals. These factors were part of the reason why Danaher reported a much-better-than-expected first quarter in April while Sartorius struggled. Danaher also rallied more than 3% and hit a 52-week high at the time when it spoke in mid-May at a Bank of America health-care conference. That may have been a month ago, but we thought management's commentary was consistent with previous messaging. Where we come away is that Danaher should not be punished for the faults of peers when it's a higher-quality, better-run company. The stock has had these periodic gaps down, and it's worked out to buy them. Up next: There's not a lot of news due out over the next 24 hours. Used vehicle retailer CarMax reports before the opening bell Friday. Shortly after the market open, we'll get a preliminary read on June S & P Global US Manufacturing and Services PMI. There's also May existing home sales at 10 a.m. ET Friday. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.