- The laggard DJIA was pressured on Tuesday while both the NASDAQ and S&P 500 closed higher again.
- However, optimism remains in the street surrounding trade talks and the potential for a stronger Chinese economy.
- Core durable goods orders fell.
Profit taking ensued on Wall Street on Tuesday following a strong start to the week on the back of Chinese data and optimism over trade talks between the US and China.
The Dow Jones Industrial Average dropped 79.29 points, or 0.3%, to 26,179.13 as a weak earnings report from Walgreens Boots Alliance Inc defined the index. The S&P 500 index added0.05 point to 2,867.24, while the Nasdaq Composite Index climbed by 19.78 points, roughly 0.3%, to 7,832.
As for US data, core durable goods orders dropped 0.1% m/m in February to leave the 3-month average at 0.0%. “That implies no acceleration in underlying investment which in turn suggests that potential US growth is not picking up and remains stuck around 1.9% y/y,” analysts at ANZ Bank argued. Treasuries rallied on the disappointing US data, steepening the curve.
DJIA levels
The index was rejected at yesterday’s highs but remains in a bullish phase around the 22nd Feb highs and through the psychological 26000 level. Eyes are now on the 2018 highs at 26951. Bears will otherwise target all the way down to the 23.6% Fibo retracement of the late Dec swing lows to late Feb swing highs at the low end of the twenty-five hundreds. This area guards a break all the way down to the 38.2% Fibo of the same range around 24400.
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