Nasdaq Tests Important Support

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After five weeks of gains, the market closed lower last week. This was due in part to statements from Federal Reserve members, including St. Louis Fed President James Bullard who indicated a rate hike in April was still on the table.

Falling oil prices also negatively impacted stocks. WTI oil lost 4.1% for the week, closing at $39.46 a barrel. Reports showed U.S. supplies hitting all-time highs.

The Wall Street Journal reported that more than half of the energy loans at several major banks could be in danger of default this year. Wells Fargo & Co (WFC) and Comerica Incorporated (CMA) were mentioned.

The yield on the 10-year Treasury note rose to 1.91% on Thursday from 1.88% on Wednesday as bond prices fell. For the week, gold lost 2.6% at $1,221.40 an ounce.

At Thursday close, the Dow Jones Industrial Average rose 13 points to 17,516, the S&P 500 fell 1 point to 2,036, the Nasdaq advanced 5 points to 4,774 and the Russell 2000 added 4 points at 1,080.

The NYSE Composite’s primary exchange traded 887 million shares with total volume of 3.4 billion. The Nasdaq crossed 1.6 billion shares. On the Big Board, advancers slightly exceeded decliners, and on the Nasdaq, decliners led by 1.2-to-1. Block trades on the NYSE fell to 4,974 from 5,434 on Wednesday and 6,232 a week ago.

For the week, the Dow lost 0.5%, the S&P 500 fell 0.7%, the Nasdaq dropped 0.5% and the Russell 2000 declined 2%.

Nasdaq Chart
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Chart Key

The small and mid caps tested near-term support on Thursday as seen on the chart of the Nasdaq.

After hitting a high for the month of 4,835 on Tuesday, the Nasdaq fell more than 2% to an intraday low of 4,735 on Thursday, slightly above support. The good news for the bulls is that the index then reversed and closed at its high of the day.

Conclusion

The 4,714 level in the Nasdaq is an important support line. If it fails to hold, the next significant support is at the 50-day moving average at 4,577 and rising. In other words, a close below 4,714 would be bearish.

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/2016/03/daily-market-outlook-nasdaq-tests-important-support/.

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