The Dow and S&P stepped higher last week while the Nasdaq tumbled. Part of this is due to an industry reclassification which is forcing some funds to sell their favorite holdings. Stocks like Netflix (NSDQ: NFLX) and Facebook (NSDQ: FB) are moving from one sector to another.

The mechanics of this move means that exchange-traded funds that focus on specific sectors will be jostling their trading. For example, Netflix is being moved from the Consumer Discretionary sector to the newly formed Communications sector.

While I am looking for some new bullish long trades within this rotation, the pressure on the Nasdaq is one of the tertiary reasons behind my sale of Ichor (NSDQ: ICHR) and Entegris (NSDQ: ENTG) earlier this month. Those stocks are both down about 5% since that sale.

We successfully exited the Ford (NYSE: F) call option trade last week but I foolishly waited on the General Motors (NYSE: GM) calls. Each day investors attitude towards a trade resolution shifts wildly, making these options trades more precarious than usual. As a reminder, I believe The Chemours (NYSE: CC) is also correlated to auto news and is being dragged down along with the sector.

As always, I welcome your comments and suggestions. I recognize the last few weeks have been frustrating on the options trading front but know that I am working on several new trades and am trying to tweak the timing better so that we don’t get caught with a stock moving against us before the event date.

Around the Portfolio:

Auto stocks initially rebounded last week when Canadian foreign minister Chrystia Freeland returned to Washington for negotiations aimed at saving NAFTA ahead of the October 1 deadline. Newswires reported that talks were “constructive and productive”. However, the stocks fell late in the week as hopes faded.

NXP Semiconductors (NSDQ: NXPI) was upgraded to Buy from Neutral at BofA/Merrill  BofA/Merrill. Analyst Vivek Arya raised the price target to $120 from $110 based on a potential sales growth recovery driven by new auto/IoT products, a stronger balance sheet, free-cash-flow growth and buybacks, and insider purchases.

It also signed a deal with Hitachi Solutions to collaborate on a new chip geared to automakers targeting the Japanese market. A recent article in the Wall Street Journal blamed the recent weakness in the stock on selling from hedge funds who arbitrage acquisition deals. With the Qualcomm purchase unraveling, they must sell their shares.

Steelcase (NDQ: SCS) provided some welcome green in the portfolio. The maker of office furniture reported earnings that beat estimates by a wide margin and raised future revenue and earnings estimates as well.

The stock jumped 23% and is up almost 30% since its inclusion in the portfolio. It is below my $23 target but I am analyzing the earnings to see how much higher the stock can go. I am loathed to let a winner like this slip out of our hands.

Steven Madden (NSDQ: SHOO) declared a three-for-two stock split. The split will entitle all stockholders of record at the close of business on October 1, 2018, to receive one additional share of Steve Madden common stock for every two shares of common stock held on that date.

Stock splits do not change a stock’s valuation in any way. The shares outstanding is increased and the price drops by a corresponding amount. The benefit is that sometimes funds that focus on lower absolute dollar-priced stocks might be inclined to purchase the stock. I don’t see this as a big factor but overall it is a slight net-positive.