Bulls started Thursday with a full head of steam, however more weakness for technology stocks and a late round of selling pushed the benchmark S&P 500 (SPX) to 4,393, a loss of 1.2%, suggests Jon Markman, editor of Strategic Advantage.
The weakness means the weekly losing streak for bulls has swollen to three. The backdrop for stocks is quite bearish. The benchmark is well below its 200-day moving average at 4,495.
A war is raging in Ukraine, commodity prices are rising, and corporate earnings reports thus far in April have been met with selling. Financial stocks finished lower on Thursday despite solid first quarter financial results from Goldman Sachs (GS) and Morgan Stanley (MS).
The weakness may have been traders simply closing positions ahead of the long weekend, yet the persistent selling into rallies approaching critical resistance points cannot be ignored.
Don’t rush to add new bullish positions until bulls can retake the 200-day moving average for the S&P 500 on a closing basis. Support for the index is 4,350 and 4,315.
The Upshot
The Dow (DJI) retreated 0.3% to 34,451.23, giving up its early gains, while the Nasdaq (IXIC) was 2.1% lower at 13,351.08.
All three major equity benchmarks closed lower for the week, with the tech-heavy Nasdaq declining 2.6%, the S&P 500 2.1% lower and the Dow down 0.8%.
Among sectors, technology and communication services led decliners on Thursday while energy posted modest gains with utilities finishing the day flat.
Breadth favored decliners three-one, and there were 544 new lows vs 283 new highs. Big caps on the new high list included UnitedHealth (UNH), Coca-Cola (KO), Shell (SHEL), Raytheon (RTX), and Deere (DE). More defensives plus energy and missiles.
Financials declined after big bank earnings. Goldman Sachs (GS), Morgan Stanley (MS), and Citigroup (C) posted first-quarter results that fell from last year but beat Wall Street estimates. Wells Fargo & Co. (WFC) declined 4.5% at market close as first-quarter revenue missed analysts' consensus.
The US 10-Year Yield (TNX) jumped by 13.8 basis points to 2.83% on Thursday, its highest intraday level since December 2018. West Texas Intermediate crude oil futures rose by $2.07 to $106.32 per barrel.
In economic data, US retail sales rose 0.5% in March, compared with a 0.6% gain expected in a survey compiled by Bloomberg and following the previous month's revised 0.8% increase. Initial jobless claims climbed to 185,000 during the week ended April ninth, above the 170,000 anticipated in a survey compiled by Bloomberg.
The University of Michigan's preliminary consumer sentiment index grew to 65.7 in April from 59.4 in March, beating expectations for a drop to 59 in a survey compiled by Bloomberg.
Meanwhile, Tesla (TSLA) Chief Executive Elon Musk offered to acquire Twitter (TWTR) for $54.20 a share, saying the social-media company needs to go private "to be a platform for free speech around the globe." Tesla shares dropped 3.7%, while Twitter ended the session 1.7% lower.
