Major Indices Stuck in Summer Trading Ranges, but…

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Stocks ended Thursday slightly higher in a dull session after two days of solid advances. Traders still considered the day a plus since it started lower and ended with a gain for the S&P 500 and Nasdaq. However, the blue-chip Dow Jones Industrial Average fell fractionally.

Global markets were mixed, as well, with the Stoxx Europe 600 up 0.6% and the Shanghai Composite falling 2.2%. The decline in Chinese stocks contributed to the lower opening in U.S. stocks, as did a pre-opening Q2 GDP report. The Commerce Department reported the economy expanded at an annual rate of 2.3% where 2.5% was forecast. First-quarter GDP was upwardly revised to 0.6% from a previously reported decline of 0.2%.

Six of the S&P’s 10 sectors closed higher with utilities in the lead, up 0.7%, as a result of the lower-than-expected GDP and the possibility of a delay in an interest rate hike by the Federal Reserve.

Consumer staples fell 0.3%, led by Procter & Gamble Co (PG). The stock fell 3.9% despite reporting a better-than-expected quarterly profit as sales declined for the sixth straight quarter.

Facebook Inc (FB) lost 1.8% after announcing quarterly expenses grew faster than revenues.

Thus far, Q2 earnings have been exceeding expectations. According to FactSet, 322 companies of the S&P 500 have reported, and earnings are on track to decline 0.9% overall, which is a big improvement over the previously forecast 4.5% decline.

Crude oil futures fell 0.6% to $48.52 a barrel. Gold lost 0.4%, closing at $1,088.40 an ounce. The benchmark 10-year Treasury note’s yield fell to 2.27% from 2.28% on Wednesday as bond prices rose.

At Thursday’s close, the Dow Jones Industrial Average fell 5 points to 17,746, the S&P 500 rose less than a point to 2,109, the Nasdaq was up 17 points at 5,129, and the Russell 2000 gained 2 points at 1,232.

The NYSE’s primary market traded over 770 million shares with total volume of 3.6 billion. The Nasdaq crossed 1.9 billion shares. On both the Big Board and Nasdaq, advancers closed slightly ahead of decliners.

NYSE Composite Chart
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Chart Key

The NYSE Composite, which tracks all stocks traded on the Big Board, is stuck in a broad (4.5%-plus) trading zone bounded by 10,664 on the bottom and 11,153 on the top. In the middle is its 200-day moving average at about 10,900.

After double-bottoming this week below 10,700, the NYSE Composite tried and failed to jump above the 200-day barrier. But even if it manages to rise above it, the index will probably have a tough time at the 50-day moving average, now at 10,967.

Nasdaq Chart
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Like the chart of the NYSE Composite, the chart of the Nasdaq shows the index fighting hard to overcome lots of overhead selling. It, too, is stuck in a 5%-plus trading range. And the volume and MACD lines are flat, although the Nasdaq’s boundaries don’t appear quite as overwhelming as the Big Board’s.

Conclusion

The rally in the Dow utilities and transports merely signifies an oversold bounce while other markets appear stuck in summer trading ranges. But the wide ranges of 4.5% to 5% are enough to please avid traders, so next week I’ll offer suggestions that could produce some hot summer action.

Today’s Trading Landscape

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.


Article printed from InvestorPlace Media, https://investorplace.com/2015/07/daily-market-outlook-nasdaq-nyse-composite-stuck-in-trading-ranges/.

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