Wednesday’s trading session demonstrated how the lunchtime crowd boosts advances by stocks.
On Wednesday, we saw how important those investors are, who check in on the stock market before, during or right after lunch to make trades. You may be one of them. Wednesday’s report from the Commerce Department’s Census Bureau, indicating that January New Home Sales rose to their highest level since 2008, sent stocks soaring. Nevertheless, by 2:00 EST, the major stock indices began to fade – actually falling into the red for about an hour. Stocks regained strength during the last hour of the session, although the indices closed off the day’s highs.
The Dow Jones Industrial Average (DIA) picked up 18 points to finish Wednesday’s trading session at 16,198 for a 0.12 percent advance, reaching 68 points above its 50-day moving average of 16,130. The S&P 500 (SPY) was unchanged at 1,845.
The Nasdaq 100 (QQQ) dipped 0.07 percent to finish at 3,676. The Russell 2000 (IWM) climbed 0.66 percent to end the day at 1,181.
In other major markets, oil (USO) advanced 0.44 percent to close at $36.75.
On London’s ICE Futures Europe Exchange, April futures for Brent crude oil declined 4 cents (0.04 percent) to $109.47/bbl. (BNO).
April gold futures declined $12.90 (0.96 percent) to $1,329.80 per ounce (GLD).
The transportation sector took on a bit more water during Wednesday’s trading session, as the Dow Jones Transportation Average declined 0.25 percent to 7,273, dropping below its 50-day moving average of 7,291 (IYT).
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks declined as the yen strengthened to 102.26 per dollar during the last hour of Wednesday’s trading session in Tokyo. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average fell 0.54 percent to 14,970 (EWJ).
In China, the Shanghai Composite Index ended a four-day losing streak, which began when banks tightened real estate loans as part of a government effort to control escalating real estate prices. The energy and metals sectors helped bring a moderate advance. The Shanghai Composite Index rose 0.35 percent to 2,041 (FXI). Hong Kong’s Hang Seng Index climbed 0.54 percent to 22,437 (EWH).
In Europe, stocks made a moderate retreat, with luxury goods manufacturers leading the decline. Fears that a drop in demand from emerging markets would hurt the sale of high-end brands had investors avoiding luxury names. The Euro STOXX 50 Index finished Wednesday’s session with a 0.29 percent decline to 3,148 – remaining above its 50-day moving average of 3,078. Its Relative Strength Index is 64.12 (FEZ).
Technical indicators revealed that the S&P 500 rose further above its 50-day moving average of 1,817 after finishing Wednesday’s trading session with a microscopic advance from 1,845.12 to 1,845.16. Its Relative Strength Index (RSI) ticked upward from 59.91 to 59.92. The MACD and the signal line are climbing above the zero line, suggesting that the S&P could continue its advance during the immediate future.
On Wednesday, four sectors advanced, four sectors declined, and the healthcare sector remained unchanged.
Consumer Discretionary (NYSEARCA:XLY): +0.56%
Technology: (NYSEARCA:XLK): +0.08%
Industrials (NYSEARCA:XLI): +0.10%
Materials: (NYSEARCA:XLB): +0.76%
Energy (NYSEARCA:XLE): -0.63%
Financials: (NYSEARCA:XLF): -0.14%
Utilities (NYSEARCA:XLU): -0.32%
Health Care: (NYSEARCA:XLV): unchanged
Consumer Staples (NYSEARCA:XLP): -0.10%
Bottom line: Stocks lost Wednesday morning’s momentum when lunch-hour traders went back to work.
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