Wednesday: SUMMARY: May 19, 2010
Almost every losing trading session over the past two weeks can be described thus: “Stocks spent the day in the red as continuing concerns about Europe’s sovereign debt situation swept over Wall Street.”
Today was no exception as traders feared that weakness in the euro will begin to impact profits at multi-national U.S. corporations, even though the embattled currency bounced back today from a four-year nadir versus the U.S. dollar. Uncertainty over pending financial legislation also contributed to the Street’s anxiety, as the Senate conducted a procedural vote on proposed regulatory reforms. Downbeat economic news played a part, as well; despite a tame round of inflationary data from the Labor Department, the Mortgage Bankers Association noted that the number of homes in foreclosure climbed to 4.63% during the first quarter. While an upwardly revised economic outlook from the Federal Reserve helped stocks recover from their intraday lows, the bears still prevailed.
The Dow Jones Industrial Average (DJIA – 10,444.37) recovered from its intraday low near 10,325, but still wrapped up the day on a drop of 66.6 points, or 0.6%. The Dow continues to hold support at its 180-day moving average, as well as the 10,400 region.
The S&P 500 Index (SPX – 1,115.05) also rebounded from its session low at 1,100, but still closed with a loss of 5.8 points, or 0.5%. The SPX has found a foothold this week above its 40-week moving average, which hasn’t been broken in nearly a year. Finally, the Nasdaq Composite (COMP – 2,298.37) gave up nearly 19 points, or 0.8%, and notched a daily close below 2,300 for only the second time since March 5. However, the tech-heavy COMP is still holding above key support at its 32-week moving average.
