The Dow Jones Industrial Average Breaks Its Losing Streak

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The losing streak for the major indices came to an end yesterday with both the Dow Jones Industrial Average and the S&P 500 scoring gains. In the S&P 500, all of its 11 sectors ended higher, with financial and energy shares leading.

The Dow Jones Industrial Average rose 0.7%, as did the S&P 500. The Nasdaq rose 0.6%, and the Russell 2000 gained 0.7%. The gains were driven by March’s consumer confidence, which grew to its highest level in 16 years, according to the Conference Board. U.S. home prices also rose in January at the fastest pace in 31 months, as buyers appeared encouraged by advances in job growth.

Noble Corporation (NYSE:NBL) rose 4%, and Chesapeake Energy Corporation (NYSE:CHK) gained 4.5%, driving the energy sector higher. And coal companies did well as reflected by the 0.7% increase in the VanEck Vectors Coal ETF (NYSEARCA:KOL). U.S. crude oil (WTI) for May delivery rose 1.3% to $48.37 per barrel.

At the close, the Dow Jones Industrial Average gained 151 points at 20,702; the S&P 500 rose 17, closing at 2,359; the Nasdaq closed at 5,875 for a gain of 35 points; and the Russell 2000 closed at 1,367, up 10 points. The NYSE’s primary exchange traded 822 million shares with total volume of 3.3 billion shares. The Nasdaq crossed 1.8 billion shares. On the Big Board, advancers outpaced decliners by 2.9-to-1, and on the Nasdaq, advancers led by 1.6-to-1. Blocks on the NYSE increased to 6,544 from 6,228 on Monday.


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The Dow Jones Industrial Average Breaks its Losing Streak

On Monday we viewed the S&P 500’s 90-minute rally that closed the day with a reversal above the index’s 50-day moving average. The same rally saved the Dow Jones, but today’s follow-through emphasized the strength of the reversals. Even though volume was only average, MACD also reversed from its oversold condition.

Conclusion: Stocks have rallied under adverse conditions and conducted the rallies with technical reversals normally associated with powerful bull markets.

Of course anything can happen, but from a technical point of view, if the next barrier for the Dow, the resistance zone at 20,850 – 20,957, is exceeded, the high at 21,169 should be quickly pierced and the bears will be sent to hibernate again.

Today’s Trading Landscape

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