- Energy leads the gains on Monday.
- Technology underperforms and weighs on Nasdaq.
- Investors are gearing up for the critical midterm elections.
Major equity indexes in the U.S. started the week on a mixed note and struggled to find direction as investors refrained from making large bets ahead of tomorrow's midterm elections.
With the U.S. sanction on Iran going into effect on Monday, the S&P 500 Energy Sector gained traction on Monday and finished the day 1.6% higher. On the other hand, a 3% fall witnessed in Apple shares weighed on the S&P 500 Technology and Communications Services indexes, which finished the day 0.3% and 0.2%, respectively, to force the tech-heavy Nasdaq Composite Index to stay in the negative territory.
Commenting on today's choppy trading action, "Anytime utilities and consumer staples are up that's a little fear ... it's the Iran sanctions poking a stick at a part of the world that's famous for not being amenable to that. Regardless of your political bent you don't know what's going to happen on Tuesday that's going to affect the next few years so you're going for safety," Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh, told Reuters.
The Dow Jones Industrial Average added 191.07 points, or 0.76%, to 25,461.9, the S&P 500 rose 15.26 points, or 0.56%, to 2,738.32 and the Nasdaq Composite lost 28.14 points, or 0.38%, to 7,328.85.
DJIA technical outlook by FXStreet Chief Analyst Valeria Bednarik
The Dow's daily chart shows that the index advanced from a flat 20 DMA but it remains below the 100 DMA. Technical indicators extended their advances, enough to challenge their midlines, but falling short of supporting an upward extension ahead. For such case, the index would need to advance beyond last week's peak of 25,722. In the 4 hours chart, the index enters the Asian session with a neutral-to-bullish stance, as it trades above its 20 and 100 SMA, with the shortest crossing above the larger, while technical indicators lack directional strength, the Momentum within neutral levels and the RSI at around 61.
Support levels: 25,229 - 25,188 - 25,137.
Resistance levels: 25,506 - 25,558 - 25,610.
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