Wall Street opened with heavy losses as traders awaited Federal Reserve Chair Jerome Powell’s semiannual monetary policy testimony before the Senate Banking Committee — and more in Tuesday’s stock market recap.
There was a slight rebound off the lows after Powell reaffirmed the Fed was looking to maintain its current accommodative policy for the time being — keeping benchmark rates near zero and asset purchases at the current pace of $120 billion per month.
The major indexes showed strength in the final hour of trading with the Dow trading to another record peak and the overall market closing higher. Meanwhile, the Nasdaq fell for the fifth time in six sessions along with the index falling below its 50-day moving average intraday but holding this level into the closing bell.
The S&P 500 edged up 0.1% despite the fade to 3,805 shortly after the opening bell.
The Dow was up 15 points, or 0.05%, with the late-day record peak tagging 31,653.
The Russell 2000 sank 0.9% after tapping an opening low of 2,169.
The Nasdaq was off 0.5% with the morning low reaching 13,003.
Energy and Utilities led sector strength with gains 1.7% and 0.8% respectively.
Consumer Discretionary and Technology paced sector laggards after giving back 0.7% and 0.3%.
Shares of AMC Entertainment Holdings Inc. (NYSE: AMC) soared 17% after the company said it would reopen all 13 theaters in New York City starting Mar. 5. New York Governor Andrew Cuomo announced that movie theaters will be allowed to open in the city.
Hollywood studios have been waiting for New York City (and Los Angeles) to reopen theaters and is seen as a major step before they release their backlog of big-budget movies. Together, New York and California account for nearly 20% of US movie ticket sales.
Square Inc. (Nasdaq: SQ) announced fourth-quarter earnings ahead of Tuesday’s opening bell. The company is expected to report a profit of 24 cents a share on revenue of $3.09 billion. The high estimate is at 40 cents a share with the low forecast at a 13 cents loss. This would equate to a 16-cent beat or an 11-cent miss.
The company has topped forecasts in three of the past four quarters by 18, 23 and two cents, while missing forecasts by 15 cents three quarters ago. There are 39 analysts that cover the stock with four Strong Buy ratings, 14 Buys, 16 Holds, four Underperforms and one Sell recommendation.
Implied volatility is suggesting the market is anticipating a move of 13% after results are released with call options leading puts by a 2:1 margin. The average move over the past eight quarters has been 6.5%.
From the global stock market recap, European markets closed mixed.
The U.K.’s FTSE 100 and France’s CAC 40 added 0.2% while the Belgium20 was up a half-point, or 0.01%. Germany’s DAX 30 fell 0.6% and the Stoxx 600 gave back 0.4%.
Asian markets were also mixed with Japan’s Nikkei closed for a holiday.
Hong Kong’s Hang Seng rose 1% and Australia’s S&P/ASX 200 was up 0.9%. South Korea’s Kospi was down 0.3% and China’s Shanghai slipped 0.2%.
S&P Case-Shiller home price index rose 0.8% to 240.8 in the December 20-City index , a new record high, after rising 1.1% to 238.7 in November. The 12-month pace accelerated to a 10.1% year-over-year clip versus 9.2% previously. The 10-City composite increased 0.9% to 254.2 versus the prior 1.2% increase to 252. The 12-month pace edged up to a 9.8% year-over-year rate from 8.9%. All of the 20-cities surveyed posted 12-month gains, with nine at a double digit pace, led by Phoenix (14.4%), Seattle (13.6%), and San Diego (13.0%).
Consumer Confidence rose 2.4 points to 91.3 in February after the 1.8 point gain to 88.9 in January. The present situation component supported the headline gain, rising to 92 from 85.5 in January. The expectations index disappointed, falling to 90.8 from 91.2. The labor differential improved, rising to 0.7 after falling to -2.5 in January. The 1-year inflation measure climbed to a 6.3% rate versus January’s 6% pace.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its losing streak to four sessions with the intraday low hitting $141.14. Fresh and upper support from last March at $141.50-$141 was breached but held. A close below the latter would indicate additional weakness towards $140-$139.50 with the 52-week low at $139.01.
Lowered resistance is at $142.50-$143.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second time in three sessions despite surging to an intraday high of 27.01. Prior and lower resistance at 27-27.50 and the 50/ 200-day moving averages were all breached but levels that held.
Support is at 22.50-22.
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) was up for the second straight session after testing an intraday low of $311.60. Current and upper support at $312-$311.50 was breached but held. A close below the latter would signal further weakness towards $310-$309.50.
The late-day rebound to $316.49 cleared lower resistance at $316-$316.50 but a level that held. A close above the latter and the recent all-time peak at $316.91 would indicate a possible run towards $318-$318.50.
RSI has flatlined with key support at 60 holding. A close below this level would suggest weakness towards 55-50. Resistance is at 70.
The Utilities Select SPDR Fund (NYSE: XLU) snapped a two-session slide after trading to an intraday high of $60.92. Near-term and lower resistance at $60.50-$61 was recovered. A move above the latter would indicate a retest towards $62-$62.50 and the 50-day moving average.
Support is at $60-$59.50 and the 200-day moving average.
RSI is back in an uptrend with key resistance at 40 holding. A close above this level would suggest additional strength towards 45-50. Support is at 35.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.