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Wall Street ends the choppy session mixed

  • Twitter shares plummeted on Jack Dorsey remarks before the lawmakers. 
  • Technology weighs on Nasdaq on Wednesday.
  • Consumer staples outperforms rival sectors.

Major equity indexes in the United States started the day in the red and failed to make a meaningful recovery as investors remain hesitant to take large positions amid the uncertainty surrounding NAFTA negotiations and the U.S. - China trade conflict. Although US President Trump, just minutes ahead of the closing bell, said that the trade talks with Canada was coming along and the outcome would be announced in the next few days, or even later today, it failed to receive a meaningful reaction from the market. Furthermore, heavy losses witnessed in tech shares further weighed on the overall market sentiment.

Twitter and Facebook executives testified before lawmakers on Wednesday over the foreign attempts to use their social media platforms to influence the U.S. politics. “Typically when companies testify in Congress the headlines are not going to be good, so it provides an opportunity for investors in the short term to sell and catch some profits,” Brant Houston, managing director of CIBC Private Wealth Management in Denver, Colorado, told Reuters. Twitter lost more than 5% on the day and Facebook dropped nearly 2.5%. 

The S&P 500 Information Technology erased 1.5% to become the worst performing sector of the day. The tech-heavy Nasdaq Composite dropped 1.2%, or 96.91 points, to end the day at 7,994.34 points. 

Over 1% gains seen both the utilities and the consumer staples sector helped the Dow Jones Industrial Average and the day 18.74 points, or 0.07% higher at 25,971.22. Finally, the S&P 500 fell 0.3%, or 8.4 points, to 2,888.31.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The Dow's daily chart shows that it bounced for a second consecutive day from a bullish 20 DMA, with both candles showing long downward wicks, a sign that buyers are not willing to give up. In the same chart, the 100 DMA advances above the 200 DMA, some 1,000 points below the current level, while technical indicators hold in positive territory, losing the downward slopes seen earlier this week.

In the shorter term, and according to the 4 hours chart, the index continues offering a neutral stance, battling around a mild-bearish 20 SMA but above bullish larger ones, while the Momentum holds around its 100 level and the RSI aims modestly higher at around 51. 

Support levels:  25,926 25,877 25,828.

Resistance levels:25,989 26,033 26,087.  

Author

Eren Sengezer

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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