Wall Street was weak throughout as disappointing earnings and profit taking weighed on sentiment — and more in Friday’s stock market recap.
The major indexes rebounded off the opening lows following better-than-expected economic news, especially from the housing market — which remains on fire. Headwinds from low inventories and high prices are however limiting an even stronger pace of sales.
A final-hour rally helped Tech and the small caps, with the mixed finish still producing gains for the week and all of the major indexes. The peak of the fourth-quarter earnings season and 13 Dow components report numbers next week.
The Russell 2000 jumped 1.1% after closing on its session high of 2,168.
The Nasdaq edged up 0.1% with the late-day peak and fresh all-time high reaching 13,567.
The Dow fell 0.6% following the opening pullback to 30,908.
The S&P 500 was lower by 0.3% with the morning low reaching 3,830.
For the week, the Nasdaq soared 4.2%, the Russell 2000 rallied 2.1%, the S&P 500 rose 1.9% and the Dow gained 0.6%.
Real Estate and Utilities led sector strength after adding 0.3% and 0.1%, respectively. Financials were the weakest sector after falling 0.7%.
Shares of GameStop Corp. (NYSE: GME) zoomed 51% following a trading halt as short-sellers continue to get hammered. The short interest in GameStop reached 138% of the shares available for trading last week, and continues to drive the stock up for its massive short squeeze.
The company recently stated holiday sales were down 3.1%. But shares still rose 100% last week and were primed for a short squeeze, in which short sellers faced with high borrowing costs and accumulating losses are forced to buy shares to cover their bearish bet.
The percentage of Nasdaq 100 stocks trading above the 50-day moving average closed at 73.52%, down 2.95%. Near-term and upper support at 75%-72.50% was breached and failed to hold. A move below the latter would indicate a retest towards 70%-67.5%. Resistance is at 77.5%-80%.
The percentage of S&P 500 stocks trading above the 200-day moving average settled at 89.28%, up 0.2%. Key resistance at 90% was challenged but held. A close above this level would signal strength towards 92.5% and the overbought high from early December. Support is at 87.50%-85%.
From the global stock market recap, European markets closed lower across the board as new business activity in the eurozone fell to a two-month low.
The Belgium20 dropped 0.7% while the Stoxx 600 and France’s CAC 40 gave back 0.6%. The UK’s FTSE 100 was down 0.3% and Germany’s DAX 30 dipped 0.2%.
Eurozone’s Markit’s flash composite PMI dropped to 47.5 January from 49.1 in December.
Asian markets settled lower as parts of Hong Kong will reportedly soon go into lockdown.
Hong Kong’s Hang Seng sank 1.6% and South Korea’s Kospi lost 0.6%. China’s Shanghai and Japan’s Nikkei fell 0.4% while Australia’s S&P/ASX 200 was off 0.3%.
Markit preliminary manufacturing PMI jumped 2 points to 59.1 in January, a new record high, after edging up 0.4 ticks to 57.1 in December. New orders improved to 59.5 versus 56.5 previously. The preliminary services PMI climbed 2.7 points to 58 in January following the 3.6 point drop to 54.8 in December. The input-price index climbed to 66 from 64.7, and is the highest ever. The preliminary January composite index also bounced 2.7 points to 57.5 after falling 3.3 points to 55.3 last month. Input prices also increased for an eighth straight month to a record peak at 66 from 64.8 in December while the employment component dipped to the lowest level since July.
Existing Home Sales rebounded 0.7% to 6,760,000 in December, versus forecasts for 6,550,000, and follows the -2.2% decline to 6,710,000 in November. Single-family sales were up 0.7% to 6,030,000 versus the -2.3% drop to a November rate of 5,990,000. Condo/coop sales rose 1.4% to 730,000 versus the -1.4% decline to 720,000 previously. The months’ supply of homes dropped to a new record low of 1.9 from 2.3 in November. The median sales price slipped to $309,800 after falling to $310,900 in November.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) rebounded after testing an intraday peak of $152.01. Near-term and lower resistance at $152-$152.50 was cleared but held. A close above the latter would signal a retest towards $153.50-$154.
Support remains at $151.50-$151 followed by $150.50-$150.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) snapped a three-session losing streak after trading to a morning high of 23.73. Prior and lower resistance at 23.50-24 and the 50-day moving average were breached but levels that held.
Support is at 21.50-21 followed by 20.50-20.
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) had its three-session winning streak snapped following the pullback to $309.09. Near-term and upper support at $309.50-$309 was tripped but held. A close below the latter would signal further weakness towards the $308-$307.50.
Resistance is at $311-$311.50 followed by $312.50-$313 with Thursday’s all-time peak at $312.71.
RSI is back in a downtrend with key support at 60 holding. A close below this level would suggest weakness towards 55-50 with the former holding since early November. Resistance is at 65-70.
The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) was down for the second time in three sessions with the intraday low reaching $417.13. Current and upper support at $417.50-$417 was breached and failed to hold. A close below the latter would suggest additional risk towards $415.50-$415.
Resistance $422.50-$423 followed by $426-$426.50 with Thursday’s all-time record high at $426.25.
RSI is showing signs of rolling over with key support at 70 failing to hold. Continued closes below this level would signal additional weakness towards 65-60. Resistance is at 75-80 with the latter representing overbought levels from earlier this month.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.