WALL STREET : DJIA rebound from worst one-day drop since March

J&J Leads Dow Higher

A solid earnings report from Johnson & Johnson helped the DJIA to a modest gain

Stocks started the week by swallowing steep losses, but traders today seemed more uneasy than downright bearish. Treasury Secretary Timothy Geithner spent the day in damage-control mode, asserting to reporters that there's "no risk" of the U.S. losing its coveted AAA credit rating, despite an S&P warning to that effect on Monday. Meanwhile, a mixed bag of earnings results only served to muddy the waters further. Texas Instruments (TXN) weighed on its fellow tech stocks after warning of Japan-related disruptions to its financial results, while early enthusiasm over a mammoth upside surprise from Goldman Sachs (GS) eventually turned into a 1.3% loss for the stock. The general mood of uncertainty helped propel gold futures to a new all-time peak north of $1,500 by midday.

However, Johnson & Johnson (JNJ) managed to emerge from the earnings confessional unscathed, with the equity leading the gainers on the Dow Jones Industrial Average all day long in the wake of its quarterly results. Elsewhere, an unexpectedly solid round of housing data also helped to tip the scales in the bulls' favor. After wobbling around breakeven for the first half of the session, the major market indexes made a decisive move higher in afternoon action.

After finding an intraday floor at 12,200 -- home to its 50-day moving average -- the Dow Jones Industrial Average (DJIA – 12,266.75) ended on a healthy gain of 65.2 points, or 0.5%. Twenty of the Dow's 30 components closed higher, with JNJ and Caterpillar (CAT) blazing the path into the black. Travelers Companies (TRV) set the pace for the nine laggards, while AT&T (T) finished the session right where it started.

The S&P 500 Index (SPX – 1,312.62) notched a similarly respectable advance of 7.5 points, or 0.6%, but was stopped short of its own 50-day trendline. Finally, the Nasdaq Composite (COMP – 2,744.97) erased its early losses to end up 9.6 points, or 0.4%. The COMP's rebound was halted near the 2,750 neighborhood, where its 50-day moving average looms.

QUOTE : “This is an earnings-driven market at this point, and some of the commentary out of the companies isn’t as bad as we expected, and forecasts going forward are reasonable,” said a senior equity analyst at Mercury Capital.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed higher due to short covering on Tuesday as it consolidates some of this month's decline. Stochastics and the RSI are turning neutral hinting that a low might be in or is near. Closes above last Friday's high crossing at 12,369 would temper the near-term bearish outlook. Closes below last Thursday's low crossing at 12,163 are needed to confirm that a short-term top has been posted and would open the door for a larger-degree decline during the last half of April. First resistance is the 10-day moving average crossing at 12,322. Second resistance is this month's high crossing at 12,450. First support is Monday's low crossing at 12,093. Second support is the reaction low crossing at 11,972.

Oil ends up on weaker dollar, contract expiration
Crude futures crept higher, bolstered by an ailing U.S. dollar. The greenback took a turn for the worse against one of its key foreign rivals today, after the euro zone's composite purchasing managers index revealed stronger-than-forecast economic growth in the region. As a result, black gold bounced back from early weakness to end comfortably north of breakeven. Crude oil for May delivery expired with a gain of $1.03, or 1%, at $108.15 per barrel. More actively traded June crude added 59 cents, or 0.6%, to settle at $108.28 per barrel.

HAPPY TRADING