Wall Street closes with moderate gains on the back of upbeat earnings

Morgan Stanley's higher-than-expected Q2 earnings lift financials higher.
Energy snaps losing streak as WTI rebounds.

Eren Sengezer FXStreet

Major equity indexes in the United States started the day modestly higher and added to their gains led by the financial sector.

After Morgan Stanely announced upbeat revenue figures for the second quarter of the year, the S&P 500 Financials Index (SPSY) rose 1.53% on the day to outperform other major sectors. "Earnings are keeping the market up. Nobody's going to sell their stocks ahead of seeing what happens here with earnings," Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York, told Reuters.

In the meantime, the S&P 500 Energy Index (SPNY), which has been limiting stocks' gains since the start of the week, closed the day with small gains after crude oil prices rebounded on Wednesday. The barrel of West Texas Intermediate settled at $68.76 to add 1% on the day after news of a big refinery shutting down for maintenance in Venezuela revived concerns over supply disruptions.

On the other hand, technology struggled to gain traction and didn't allow the tech-heavy Nasdaq Composite to record decisive gains. The Dow Jones Industrial Average gained 80.29 points, or 0.32%, to 25,200.18, the S&P 500 added 6.07 points, or 0.22%, to 2,815.62, and the Nasdaq Composite closed virtually unchanged at 7,854.44.

DJIA Technical outlook (via FXStreet Chief Analyst Valeria Bednarik)

"In the daily chart, the index advanced further above all of its moving averages, with the 20 DMA gaining upward traction above the 100 DMA, while technical indicators remain near oversold readings, the Momentum still lacking directional strength but the RSI advancing, currently at 67, all of which favors additional gains ahead."

"Shorter term, and according to the 4 hours chart, the index is also biased higher, as a bullish 20 SMA, currently at 25,090 keeps leading the way higher, as the Momentum advances at fresh 1-week high and the RSI hovers around 70."

According to the analyst, supports could be seen at 25,155, 25,090 while resistances align at 25,216, 25,249 and 25,306.

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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