Wall Street ends mixed as drop in energy counters gains in financials

• Financial  outperforms other major sectors on upbeat earnings data.
• Falling crude oil prices weigh on energy shares.
• Financial-heavy Dow Jones finishes higher while Nasdaq and S&P 500 slump.

Major equity indexes in the United States started the day in the positive territory fueled by the higher-than-expected earnings reported by the Bank of America, which allowed its shares to add over 4% on the day and help the sector recover last Friday’s losses. Furthermore, the data from the United States showed a strong increase in retail sales to point to robust economic activity in the second quarter.

However, stocks struggled to push higher as energy shares came under a heavy selling pressure. Amid easing concerns over supply disruptions, crude oil prices  fell sharply on Monday with the barrel of West Texas Intermediate settling 4.15% lower at $68.06. The S&P 500 Energy Sector (SPNY) lost 1.18% on the day.

Commenting on today’s market action,  “it looks as though we’re just taking a bit of a break after a good run last week. Investors may also be doing trading as necessary,  ahead of a slew of earnings reports this week and Federal Reserve Chairman Jerome Powell’s first congressional testimony,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, told Reuters.

The Dow Jones Industrial Average gained 42.48 points, or 0.17%, to 25,061.89, the S&P 500 erased 3.35 points, or 0.12%, to 2,797.96 and the Nasdaq Composite lost 21.74 points, or 0.28%, to 7,804.24.

DJIA Technical outlook (via FXStreet Chief Analyst Valeria Bednarik)

“The daily chart for the Dow shows that the index reached a 1-month high before easing just modestly, still developing above its moving averages, despite the larger ones lack clear directional strength. Technical indicators have lost their upward strength after nearing overbought readings, but remain far from suggesting an upcoming slide.”

“In the 4 hours chart, technical readings continue to indicate a positive bias, as the index holds above a bullish 20 SMA, while the RSI indicator recovered its upward slope in positive territory, as the Momentum holds above its midline, losing its upward strength as the index retreated from its early highs.”