Wall Street closes modestly higher led by newly constructed communication services sector
|- Today's data confirms that the U.S. economy preserves growth momentum.
- Financials continue to slide following Fed's rate hike.
- Internet giants' strong performance lifts the communication services.
Major equity indexes started the day slightly higher on Thursday and closed in the positive territory on the back of an improved market sentiment amid upbeat macroeconomic data releases from the U.S.
The U.S. Bureau of Economic Analysis on Thursday announced that the real-GDP in the U.S. grew by 4.2% in the second quarter in the third estimate and the durable good orders, which declined by 1.2% in July, rebounded in August and increased by 4.5%. Commenting on the GDP report, "The final revision to Q2 GDP was not terribly exciting, leaving overall annualized growth at +4.2%, as expected. Real final sales growth, at least, was revised up to +5.4% from +5.3%, having been expected to stay where it was. The story is still the same: It was a great quarter, assisted by a strong rebound in consumption spending (after a weak Q1), and benefitting from a scramble in activity as businesses responded to the heating trade war," Reuters said.
The S&P 500 Communications Services Index, to which Facebook, Google-parent Alphabet, Netflix, as well as other internet and social media companies were added on Monday's sector reshuffle, closed the day 0.8%.
On the other hand, the rate-sensitive S&P 500 Financials Index remained under pressure following FOMC's monetary policy announcements yesterday and finished the day 0.35% lower.
The Dow Jones Industrial Average added 59.21 points, or 0.22%, to 26,444.49, the S&P 500 rose 8.3 points, or 0.29%, to 2,914.27 and the Nasdaq Composite gained 52.32 points, or 0.65%, to 8,042.69.
DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik
Despite closing in positive territory, the Dow posted its fourth consecutive lower low and lower high daily basis, suggesting that the corrective decline may continue. In the daily chart, the Momentum keeps easing with moderate downward strength well above its mid-line, while the RSI pared its decline and is now attempting a recovery around 60. The 20 DMA in the mentioned chart maintains a strong bullish slope, now at 26,242.
Shorter term, and according to the 4 hours chart, the index remains below a bearish 20 SMA but above bullish 100 and 20 SMA, while technical indicators recovered some ground within negative territory, but the RSI has already lost upward strength, supporting the longer term view that a downward continuation is still possible.
Support levels: 26,412 - 26,351 - 26,307.
Resistance levels: 26,563 - 26,499 - 26,557.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.