Support Holds on a Wild Day on Wall Street

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The Dow Jones Industrial Average ended Wednesday with a triple-digit gain after investors endured a volatile session. The spread between the day’s low and high was more than 420 points. The low occurred shortly after the opening, and the high was achieved in the final hour of trading.

At the end of the wild day, the Dow had gained 1.1% and the S&P 500 rose 0.5%. But the Nasdaq fell 0.3% due to selling in technology stocks.

Yahoo! Inc. (YHOO) fell 4.8% after the company said it planned to lay off 15% of its workforce.

The lower opening was attributed in part to an Institute for Supply Management (ISM) report that showed a bigger-than-expected decline in the service sector.

Crude oil futures gained 8%, settling at $32.28 barrel. This was credited to the fall in the U.S. dollar, which resulted in the euro closing at its highest level in months, up 1.7% at 1.1104. The buck fell 1.7% against the yen to 117.894.

Many commodity-related stocks jumped. Chesapeake Energy Corporation (CHK) was up 12.4%, making it the best performer in the S&P 500. Exxon Mobil Corporation (XOM) gained 5.2%, and Anadarko Petroleum Corporation (APC) added 8.2% following a better-than-expected earnings report. Miner Freeport-McMoRan Inc (FCX) rose 11.5%.

Gold was up 1.2% at $1,141.30 an ounce. The yield on the 10-year Treasury note rose to 1.88% from 1.87% on Tuesday.

At Wednesday’s close, the Dow Jones Industrial Average rose 183 points to 16,337, the S&P 500 gained 10 points at 1,913, the Nasdaq fell 13 points to 4,504, and the Russell 2000 was up 1 point at 1,010.

The NYSE Composite’s primary exchange traded 1.2 billion shares with total volume of 5.1 billion. The Nasdaq crossed 2.4 billion shares. Advancers outpaced decliners by 1.6-to-1 on the Big Board. On the Nasdaq, decliners and advancers were breakeven. Block trades on the NYSE rose to 5,908, up from 5,579 on Tuesday.

Dow Jones Industrial Average Chart
Click to Enlarge

After Wednesday’s opening gap up took out most of the shorts, the Dow Jones Industrial Average fell to its low of the day below 16,000.

The significance of that line is shown by its power to hold and have the index reverse from it on what was one of the wildest days in weeks. Note the heavy buying on the close.

Conclusion

Although the Dow industrials tend to stall at about 16,400, the rally from 16,000 in one day to that barrier on relatively high volume is giving us notice that the bull is not going down without a fight. We may have to amend the saying “never sell a dull market” to include “never sell a volatile market either.”

Traders had a lot to work with Wednesday while long-term investors jumped on utility stocks, which rose 1.2%. While the group did poorly last year, the Utilities SPDR (ETF) (XLU) is already up 7.7% this year. Who said there are no good long-term investments in the stock market?

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/2016/02/daily-market-outlook-support-holds-on-a-wild-day-on-wall-street/.

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