U.S. markets showed slight weakness throughout the first half of Wednesday’s action as Wall Street awaited the Fed’s update on interest rates. The announcement of a quarter-point rate cut was widely anticipated but was no help for the bulls as fresh lows were tapped afterwards as the Fed gave no clear signal on further rate cuts.
Meanwhile, the fallout from the Saudi drone attacks from the weekend continued after President Trump tweeted he has instructed the Secretary of the Treasury to substantially increase sanctions on the country of Iran. Despite the nervousness, the strong rebound into the close was an ongoing bullish signal for the major indexes with volatility spiking to its highest level in 6 sessions before settling lower.
The Russell 2000 stumbled 0.6% following the late day back-test to 1,557. Prior and key support at 1,560 from last week, and late July, was breached but held with risk towards 1,540-1,525 and the 50-day moving average on a close below this level.
The Nasdaq was down 0.1% after tapping a low of 8,086 after the Fed news. Near-term and lower support at 8,150-8,100 was breached but held on the close above the former with a move below 8,050 and the 50-day moving average signaling additional weakness towards 8,000-7,950.
The Dow nudged up 0.1% despite testing an intraday low of 26,899. Current support at 27,000-26,800 was split but held with a move below the latter getting 26,600 and the 50-day moving average back in play.
The S&P 500 added a point, 0.03%, after trading in a 30-point range and testing a 2nd half low of 2,978. Upper support at 2,975-2,950 held before the late day bounce to 3,007 and close above the 3,000 level for the 5th time in 6 sessions.
Utilities and Financials led sector strength after rising 0.4% while Consumers Staples and Materials inched up 0.2% and 0.1%, respectively. Energy and Real Estate were the leading laggards after falling 0.5% and 0.3%.
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CACI (CACI) added to Conviction Buy at Goldman Sachs
Square (SQ) upgraded to Hold from Sell at Craig-Hallum
Zimmer Biomet (ZBH) upgraded to Buy from Hold at Canaccord wit
FedEx (FDX) downgraded to Hold from Buy at Deutsche Bank
Masco (MAS) downgraded to Neutral from Buy at Buckingham w
Travelers (TRV) downgraded to Neutral from Buy at BofA/Merrill
THURSDAY'S EARNINGS ANNOUNCEMENTS
Before the open: Darden Restaurants (DRI), InMed Pharmaceuticals (IMLFF),
After the close: Research Solutions (RSSS), Scholastic (SCHL), Steelcase (SCS)
UPCOMING ECONOMIC NEWS
Thursday's economic reports (EST):
Jobless Claims - 8:30am
Philadelphia Fed Business Outlook Survey - 8:30am
Current Account - 8:30am
Existing Home Sales - 10:00am
Leading Indicators - 10:00am
METALS / OIL
Gold closed at $1515.80 an ounce,