U.S. markets continued their month long see-saw action after tapping fresh weekly lows, then closed higher, despite moves in the U.S. bond market highlighting ongoing fears of a recession. The 10/2-year Treasury yield inverted to levels not seen since 2007 with the rate on the benchmark 30-year Treasury bond also hitting a new all-time low.
Despite the worries, the major indexes showed strength throughout the second half of action to reclaim near-term resistance levels. Volatility eased after closing back below a key level of support but remains at a high risk level winding down the week and month.
The Russell 2000 rallied 1.2% despite testing a fresh monthly low of 1,450 on the open. Current and lower resistance at 1,475-1,490 was cleared but held on the rebound to 1,478 afterwards with more important hurdles at 1,500-1,515 and 200-day moving average.
The Dow gained 1% following the midday push to 26,041. Prior and lower resistance at 26,000-26,200 was cleared and held with more important hurdles at 26,400-26,600 and the 50-day moving average.
The S&P 500 added 0.7% after trading in a 37-point range while trading to an intraday high of 2,890. Lower resistance at 2,875-2,900 was recovered with a move above the latter getting 2,925-2,950 and the 50-day moving average back in play.
The Nasdaq rose 0.4% after testing an intraday high of 7,866. Near-term and lower resistance at 7,850-7,900 was cleared and held with a close above the 7,950 level getting 8,000-8,050 and the 50-day moving average back in focus.
Energy and Consumer Discretionary were the strongest sectors after rising 1.4% and 1.3%, respectively, while Industrials jumped 1.2%. Utilities were the only sector that showed weakness after falling 0.3%.
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Papa John's (PZZA) upgraded to Buy from Hold at Stifel
Pfizer (PFE) upgraded to Hold from Sell at DZ Bank
Targa Resources (TRGP) upgraded to Strong Buy from Outperform at Raymond James
Autodesk (ADSK) downgraded to Underperform from Neutral at BofA/Merrill
Catalent (CTLT) downgraded to Sector Weight from Overweight at KeyBanc
Kelly Services (KELYA) downgraded to Neutral from Buy at Northcoast
THURSDAY'S EARNINGS ANNOUNCEMENTS
Before the open: Abercrombie & Fitch (ANF), BestBuy (BBY), Burlington Stores (BURL), Dollar General (DG), Dollar Tree Stores (DLTR), Hain Celestial Group (HAIN), Malibu Boats (MBUU), Patterson Companies (PDCO), Sanderson Farms (SAFM), TD Bank Group (TD), Tech Data (TECD), Titan Machinery (TITN)
After the close: Ambarella (AMBA), Cooper Companies (COO), Dell Technologies (DELL), Marvell Technology (MRVL), Ulta Beauty (ULTA), Workday (WDAY), Yext (YEXT)
UPCOMING ECONOMIC NEWS
Thursday’s economic reports (EST):
Jobless Claims - 8:30am
PMI Composite Flash - 9:45am
Leading Indicators - 10:00am
Kansas City Fed Manufacturing Index - 11:00am
METALS / OIL
Gold closed at $1,549.10 an ounce,