Markets Keeping a Close Eye on Oil Agreement

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On Monday, stocks got a boost from a climb in the price of oil and a bounce in European markets. The increase in crude oil came following a statement from Russian President Putin supporting efforts to limit production.

Putin’s efforts will be tested later this week when the World Petroleum Congress meets in Istanbul to decide whether to limit production, and by what amount. Since scores of producing countries and companies are involved, a decision is considered by many analysts to be unlikely, or of little effect.

Nevertheless, stocks rose in anticipation of $50 per barrel oil being the point of stabilization. The Dow industrials and the S&P 500 rose 0.5%, and the Nasdaq jumped 0.7% on the news. WTI crude oil closed at $51.32 per barrel, up 3.1%.

All 11 sectors of the S&P 500 registered gains, with energy (+1.5%), utilities (+0.8%) and technology (+0.7%) leading.

Apple Inc. (NASDAQ:AAPL) gained 1.74% due to Samsung’s (OTCMKTS:SSNLF) problems with the battery in its new Galaxy 7 series. And the peripheral suppliers to Apple gained, as well. (see the Trade Of The Day)

Markets were thin, and thus volatile since bond markets and some foreign bourses were closed.

At the close, the Dow Jones Industrial Average gained 69 points at 18,329; the S&P 500 closed at 2,164 for a gain of 10 points; the Nasdaq added 36 at 5,329; and the Russell 2000 closed at 1,251 for a gain of 14 points. The NYSE’s primary exchange traded less than 667 million shares with a total of 2.9 billion shares traded. Nasdaq crossed 1.4 billion shares. On the Big Board, advancers outpaced decliners by 2.5-to-1, and on the Nasdaq, advancers led by 2.4-to-1. Blocks on the NYSE fell to 4,166 from 5,133 on Friday.

S&P 500 hits 50-day MA
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Markets Keeping a Close Eye on Oil Agreement

Despite a low-volume day with a push from crude oil and the technology sector, the 500 again failed to close above its 50-day moving average. Thus the index is still confined to the trading range of 2,120 to 2,180 that began in mid-July.

Conclusion: The major indices are all stuck in trading ranges similar to that of the “500.” The DJIA is also stuck with its 50-day at 18,370 and closed yesterday at 18,329 and a high of the day at just above the line at 18,400. Highs that penetrate significant resistance zones are positive but not conclusive.

Technically, we should be buyers since the trend is decidedly bullish. Eventually we will get a breakout, but I have doubts that President Putin’s push for higher oil prices will be successful enough to be the catalyst. Instead, Q3 earnings begin with Alcoa Inc (NYSE:AA). Analysts expect AA to earn 12 cents per share on sales of $5.33-billion. Solid earnings from U.S. companies are what are needed to blast off through five months of resistance. And so this morning the focus is on AA.

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/2016/10/sp-500-oil-agreement-dow-nasdaq/.

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