Wall Street closes substantially lower for the second straight day


  • All major sectors close in red on Thursday, energy leads losses.
  • CBOE Volatility Index rises 13%.
  • Investors turn their attention to Q3 earnings.

Although it looked like an early recovery attempt witnessed in the technology shares was helping the major equity indexes in the U.S. start retracing yesterday's losses, the sell-off picked up strength in the second half of the day with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite closing the day 2.14%, 2.06%, and 1.2% lower.

Commenting on Wall Street's dismal performance, "Equities have some real concerns, rising interest rates, trade contention with China, and the natural worry over an ageing bull market. But stocks also have enormous profits. The S&P  500 was up 59 percent from its January 2016 low at Wednesday's open. Yesterday's plunge was as much about repositioning and profits as it was about tech fears on trade and the possibility of lower growth next year," FXStreet Senior Analyst Joseph Trevisani said.

The risk-off mood and the weekly EIA report, which showed a larger-than-expected buildup in crude oil inventories, continued to weigh on the price of the barrel of West Texas Intermediate on Thursday. The commodity-sensitive S&P 500 Energy Index lost 3.09% to record the biggest daily decline within 11 major sectors.  

Meanwhile, today's inflation report showed that the CPI rose 2.3% and 0.1% on a monthly and yearly basis, respectively. Although these numbers stayed slightly below the analysts' estimates, they did little to nothing to change the expectations of another 25 bps Fed rate hike in December. The S&P 500 Financials Index fell 2.93% to reflect the concerns over the potential negative impact of higher rates on the economic growth.

With the third-quarter earnings season kicking off tomorrow, investors will look for strong numbers to forget about the last two days.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The DJIA attempted to trim losses during the American afternoon but met selling interest in the 25,670 region, resuming from there its decline to reach its lowest since last July, at 24,897. Having bounced from this last, the index anyway closed the day a few points below the 200 DMA and far below the shorter ones, while technical indicators maintain their strong vertical downward slopes, despite being in extreme oversold readings.

In the 4 hours chart, the 20 SMA gains bearish momentum after crossing below the 100 and 200 SMA, all of them far above the current level, while technical indicators maintain their bearish slopes within oversold readings, the Momentum at fresh multi-month lows and the RSI currently at 19, after hitting earlier in the day 12.

Support levels: 25,008 - 24,951 - 24,897.

Resistance levels: 25,100 - 25,156 - 25,210.

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD trades below 1.1450 despite disappointing US data

EUR/USD is having a difficult time gathering bullish momentum in the early American session and trades in the negative territory below 1.1450. The US Census Bureau reported on Friday that Retail Sales in December fell by 1.9%, missing the market expectation of a no-change by a wide margin.

EUR/USD News

GBP/USD drops below 1.3700 as dollar gains traction

GBP/USD stays under modest bearish pressure in the American session and trades below 1.3700. The US Dollar Index is clinging to modest daily recovery gains near 95.00 despite weaker-than-forecast macroeconomic data releases from the US.

GBP/USD News

Gold fluctuates in daily range above $1,820 after US data

Gold declined to $1,820 during the European trading hours but managed to edge higher toward $1,830 in the early American. The benchmark 10-year US Treasury bond yield retreated from 1.75% after the dismal US data, allowing XAU/USD to gain traction.

Gold News

Dogecoin price on track to hit new highs, rallying 16% with Tesla payments going live

Tesla announced that it accepts Dogecoin and cannot receive or detect any other cryptocurrency. Analysts have predicted an explosive rally in Dogecoin price, continuing the uptrend. 

Read more

Why did TSLA stock fall 7% on Thursday?

Tesla stock dumps on Thursday as tech takes a bath. TSLA shares fell nearly 7% to close at $1,031.56. Tesla support at the short-term pivot remains at $980.

Read more

Forex MAJORS

Cryptocurrencies

Signatures