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.
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.