by Sam Collins | June 28, 2013 2:23 am
A 0.5% increase in May’s personal income report released at 8:30 a.m. led to a 100-point pop on Thursday’s opening. And a statement by Fed governor Jerome Powell that “market adjustments” in the past month have been “larger than would be justified by any reasonable reassessment” of its policies also moved stocks higher.
Other economic reports were also positive. The number of prospective buyers of previously owned homes jumped in May to its highest level in over six years, and unemployment benefits decreased, meeting expectations. Finally, personal spending rose in May versus April to complete a perfect day of supportive news.
At the close, the Dow Jones Industrial Average was up 114 points to 15,024, the S&P 500 rose 10 points to 1,613, and the Nasdaq gained 26 points at 3,402. The NYSE traded 737 million shares and the Nasdaq crossed 431 million. On the Big Board, advancers were ahead of decliners by 4.8-to-1, and on the Nasdaq, advancers were ahead by 3.7-to-1.
The Dow industrials rallied for the third successive day, taking the index to an important test of its ability to penetrate a pair of moving averages — the 50-day at 15,034 and the 20-day at 15,046.
Conclusion: In the previous Daily Market Outlook, I concluded that the S&P 500 would probably not bounce higher than its 50-day moving average at 1,619, with a likely reversal down and the possibility of a full 50% retracement of the November low to May high. If that were to happen, the target was stated as 1,513. The S&P 500′s high Thursday was 1,620, and it closed at 1,613.
The current chart of the Dow industrials shows the 50-day moving at 15,034. The intraday high was 15,075, but the index closed at 15,024. A close above the 50-day would set the index up for a charge against the bearish resistance line at about 15,200 and the June high of 15,340. But a reversal down would also likely result in a full 50% retracement of the November low to May high and a downside target of 14,000, which also happens to be the current level of the 200-day moving average.
I seldom reserve space in this report for a pure rant, but today’s, and last week’s, ill-timed, irresponsible, air-headed, contrary statements by the Federal Reserve’s own regional presidents are intolerable.
In over 45 years of listening to Fed statements, I don’t remember people in such sensitive posts, like Powell, blaming investors for the volatility that resulted from their own extreme mouthing off.
Mr. Bernanke should get it right the first time, exercise more judicious language, and enforce the same on his regional underlings. “And that’s all I have to say about that.”
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
Source URL: http://investorplace.com/2013/06/daily-stock-market-news-the-number-everyone-should-be-watching-on-the-dow/
Short URL: http://invstplc.com/1fvGpPH
Copyright ©2014 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.