Wall Street closes modestly lower on materials and industrials sell-off

Materials and industrials suffer heavy losses.
Crude oil recovery boosts energy.
Nasdaq closes slightly higher as tech rebounds.

Eren Sengezer FXStreet

After starting the day lower, major equity indexes staged a recovery in the second half of the day and the Dow Jones Industrial Average and the S&P 500 closed with small losses while the Nasdaq Composite stayed green when the closing bell rang.

Concerns over lower demand from China amid the trade conflict weighed heavily on the S&P 500 Materials and Industrials indexes, which closed the day 3.4% and 1.5% lower, respectively. “If industrials and materials are weighed on because of concerns about global activity, it’s going to cast a pall over the market at large since S&P 500 companies generate about half of their business from overseas markets,” Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters.

On the other hand, after falling for three straight days, crude oil prices rebounded on Tuesday with the barrel of West Texas Intermediate settling around $1 higher near the $75 mark. Supported by the WTI's price action, the S&P 500 Energy Index added 1% to become the best performing major sector of the day.

The Dow Jones Industrial Average lost 53.49 points, or 0.2%, to 26,433.29, the S&P 500 erased 3.74 points, or 0.13%, to 2,880.69 and the Nasdaq Composite gained 3.78 points, or 0.05%, to 7,739.73.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The Dow remained below its 20 DMA for a second consecutive day, while in the daily chart, the Momentum indicator is pretty much flat below its 100 level and the RSI aims modestly lower around 52, all of which leans the risk toward the downside.

In the 4 hours chart, the index is retreating from a bearish 20 SMA which crossed below the 100 SMA, while technical indicators recovered within negative readings, the Momentum now flat around its 100 level and the RSI resuming its decline, currently at 42, also indicating that the bearish case is stronger at the time being.

Support levels: 26,435 - 26,381 - 26,322.

Resistance levels: 26,534 - 26,591 - 26,660.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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