Tuesday’s losses were relatively light despite the terror attacks in Brussels.
Travel-oriented stocks took a hit. For example, Delta Air Lines, Inc. (DAL) fell 1.5%, American Airlines Group Inc (AAL) lost 1.6% and Royal Caribbean Cruises Ltd (RCL) fell 2.9%.
But a recovery in the health care sector, up 1%, helped offset losses in other areas. And light volume due to the upcoming long holiday weekend also served to dampen the impact of the tragedy on the market.
WTI crude oil lost 0.2% at $41.45 a barrel, and gold added 0.4% at $1,248.20 an ounce. The yield on the 10-year U.S. Treasury note rose to 1.94% from 1.92% on Monday as bond prices fell. And the euro declined 0.2% against the U.S. dollar, closing at $1.1218.
The Dow Jones Industrial Average fell 41 points to 17,583, the S&P 500 lost 2 points at 2,050, the Nasdaq rose 13 points to 4,822 and the Russell 2000 gave up a point at 1,097.
The NYSE Composite’s primary exchange traded about 820 million shares with total volume of 3.4 billion. The Nasdaq crossed 1.6 billion shares. On the Big Board, decliners outpaced advancers by 1.2-to-1, and on the Nasdaq, decliners led by a slight margin.
Some readers noted that Monday’s chart of the iShares Russell 2000 Index (ETF) (IWM) had the correct closing price for Friday but left off several days of data. The only change Tuesday was a sell signal from the MACD indicator.
I also drew a major trendline from the June high, which connects to the resistance line at $114 and the 200-day moving average.
The gap from $110.83 to $112.50 could be an upside target, but we will probably see a pullback to $107 before a further advance.
The SPDR S&P MidCap 400 ETF (MDY) is in a much stronger position than IWM. It has held above its 200-day moving average for four days and has penetrated it with several step-ups. It also closed the gap made in December, which remains open on IWM, and volume is slightly better than too.
Conclusion
The big-cap stocks have been getting a lot of attention versus the mid and small caps. For those who like to see the soldiers lead, the past several days have not been kind.
A consolidation is due and, in fact, may have already started. Initial support for the S&P 500 is at 2,020, and then the 200-day moving average at 2,017. It will take a maximum push with lots of volume to overcome what lies above Tuesday’s close. Thus, I would still be selling into current strength.
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.
