On Tuesday, the Dow Jones Industrial Average declined while the other major stock indices advanced.
Tuesday brought us the inverse of the situation which we saw on Friday, when the Dow Jones Industrial Average was the only major stock index to stay out of the red. On Tuesday, the Dow was the only index in the red, while the other major stock indices advanced. Setting the Dow back on Tuesday were earnings misses by Verizon (VZ) and Johnson & Johnson (JNJ), each of which declined by more than one percent. Another big decliner was Travelers (TRV), which sank 1.70 percent, despite an earnings beat. The positive statement released by CEO Jay Fishman was overruled by analysts who saw the company’s profits sinking next quarter.
The Dow Jones Industrial Average (DIA) lost 44 points to finish Tuesday’s trading session at 16,414 for a 0.27 percent decline. The S&P 500 (SPY) advanced 0.28 percent to close at 1,843.
The Nasdaq 100 (QQQ) surged 0.74 percent to finish at 3,617. The Russell 2000 (IWM) climbed 0.62 percent to end the day at 1,175.
In other major markets, oil (USO) soared 0.89 percent to close at $33.99.
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced 50 cents (0.47 percent) to $106.85/bbl. (BNO).
February gold futures declined 20 cents (0.02 percent) to $1,240.00 per ounce (GLD).
Transports dodged the polar front on Tuesday, as the Dow Jones Transportation Average climbed 0.57 percent (IYT).
In Japan, stocks advanced as the Bank of Japan began its two-day monetary policy meeting. The exchange rate for the yen continues to be the dominant factor in stock market activity. There is a good deal of speculation that the nation’s central bank will weaken the yen to 110 per dollar. Japanese stocks soared as the yen weakened to 104.68 per dollar during Tuesday’s trading session in Tokyo. A weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average surged 0.99 percent to 15,428 (EWJ).
Stocks made a huge advance in mainland China and that can only mean one thing: that the People’s Bank of China pumped another liquidity injection into the money market. This time, the amount was the equivalent of $42 billion. The Shanghai Composite Index climbed 0.86 percent to 2,008 (FXI). Hong Kong’s Hang Seng Index advanced 0.45 percent to 23,033 (EWH).
In Europe, stocks made an almost-immeasurable decline after the ZEW Indicator of Economic Sentiment in Germany retreated from 62.0 to 61.7. The indicator for the current economic situation in the Eurozone increased by 6.2 points to negative 48.2. The Euro STOXX 50 Index dipped microscopically from 3,153.17 to 3,153.08 – remaining above its 50-day moving average of 3,055. Its Relative Strength Index is 63.54 (FEZ).
Technical indicators revealed that the S&P 500 climbed further above its 50-day moving average of 1,809 after advancing 0.28 percent to finish Tuesday’s trading session at 1,843. Its Relative Strength Index rose from 56.49 to 58.51. The MACD is now on a level trajectory, just below the signal line, which would suggest that the S&P could remain in the 1,840 – 1,849 range during the immediate future.
On Tuesday, all sectors advanced except for the consumer discretionary sector, which dipped 0.09 percent.
Consumer Discretionary (XLY): -0.09%
Technology: (XLK): +0.50%
Industrials (XLI): +0.10%
Materials: (XLB): +0.61%
Energy (XLE): +0.83%
Financials: (XLF): +0.09%
Utilities (XLU): +1.10%
Health Care: (XLV): +0.58%
Consumer Staples (XLP): +0.38%
Bottom line: Tuesday’s trading session brought us the inverse of the situation we saw on Friday. This time, the Dow was in the red, while the other indices advanced.
Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.