WALL STREET : DJIA dips 2.04%

SPX & NASDAQ  Surrender Year-to-Date Gains

Despite Japan's Nikkei index rebounding from its worst performance in more than two decades, U.S.-listed stocks spent yet another session mired in red ink today. On the economic front, investors jeered news that new home construction fell to the second-lowest level on record last month, as well as data showing the biggest increase in food prices in 36 years. However, the primary driver behind the broad-market sell-off was once again earthquake-torn Japan, where four crippled nuclear reactors continue to emit dangerous amounts of radiation. What's more, stocks steepened their slide after the European Union's (EU) energy commissioner warned of "possible catastrophic events" in Japan, and the U.S. reportedly ordered citizens within a 50-mile radius of the crippled nuclear plant to evacuate or remain indoors.

Against this backdrop, the stars once again aligned in the bears' favor, with only the Dow Jones Industrial Average (DJIA) maintaining its year-to-date gain.

The Dow Jones Industrial Average (DJIA – 11,613.30) swallowed a loss of 242.1 points, or more than 2%, to end south of its 80-day moving average for the first time since late August. In fact, all of the index's 30 components settled in the red, with General Electric (GE) and IBM (IBM) pacing the decline with losses of 3.4% and 3.8%, respectively. What's more, the blue chip barometer whittled its year-to-date gain down to only 0.3%. Now, the Dow is attempting to find a floor in the 11,600 region, which acted as support at the start of the year.

The S&P 500 Index (SPX – 1,256.88) ended on a similar deficit of nearly 25 points, or 2%, and is on pace to finish the week beneath both its 10-week and 20-week moving averages for the first time since late August. Finally, the Nasdaq Composite (COMP – 2,616.82) gave up 50.5 points, or 1.9%, but stopped its retreat short of the 2,600 level. Thanks to this week's broad-market sell-off, both the SPX and COMP are in the red for the year.

Crude rebound on domestic inventories
Crude futures bounced back from yesterday's drubbing, thanks to escalated fighting in the Middle East and a smaller-than-anticipated rise in domestic stockpiles. More specifically, the Energy Information Administration said crude inventories rose by 1.7 million barrels last week, falling short of economists' forecast for a 2.1-million-barrel jump. However, black gold pared the majority of its gains in afternoon trading, thanks to continued uncertainty about Japan's nuclear crisis. By the close, April-dated crude futures added 80 cents, or 0.8%, to end at $97.98 per barrel.

Gold rebound on Bahrain tensions and deepening Japan nuclear crisis
Gold futures also rebounded today, as concerns about Japan's nuclear situation and violent clashes in Bahrain whetted investors' appetite for "safe haven" assets. However, hints of a delayed rate hike from the European Central Bank (ECB) bolstered the greenback, negating a healthy portion of gold's gains. Against this backdrop, gold for April delivery tacked on $3.30, or 0.3%, to end at $1,396.10 an ounce.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed lower on Wednesday as it extends the decline off February's high. Ongoing concerns over Japan's nuclear disaster along with today's negative US housing starts data fueled additional investor selling.

The low-range close sets the stage for a steady to lower opening on Thursday.

Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If the Dow extends this month's decline, the 38% retracement level of the June-February rally crossing at 11,339 is the next downside target. Closes above the 20-day moving average crossing at 12,118 are needed to confirm that a short-term low has been posted.

First resistance is the 10-day moving average crossing at 12,050.

Second resistance is the 20-day moving average crossing at 12,118.

First support is today's low crossing at 11,555.

Second support is 38% retracement level of the June-February rally crossing at 11,339.

HAPPY TRADING