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  • DJIA, ended higher by 122.42 points, or 0.47%, at 26,201.04.
  • S&P 500 index added 23.02 points, or 0.8% to 2,910.63.
  • Nasdaq Composite index climbed 87.02 points to 7,872, a gain of 1.12%.

Despite the ISM disappointments, investors on    Thursday took solace in the  speculations  that the Federal Reserve will come to the rescue for the third time this year later this month. As a result, stocks recovered from their worst levels on the day and the Dow Jones Industrial Average, DJIA, ended higher by 122.42 points, or 0.47%, at 26,201.04. The S&P 500 index added 23.02 points, or 0.8% to 2,910.63 while the Nasdaq Composite index climbed 87.02 points to 7,872, a gain of 1.12%.

US data disappoints again

The US non-manufacturing ISM was much weaker than expected, falling to 52.6 in September from 56.4 in August – the lowest reading in three years. “New orders fell to 53.7 (last: 60.3) and employment fell to 50.4 (last: 53.0). The data confirmed that weakness in manufacturing is spreading to broader sectors of the economy. Businesses cited tariffs, uncertainty, and rising costs and wages as negatives. Prices paid rose to 60.0 (last: 58.2). The data highlight the importance of making progress with China in next week’s trade talks,” analysts at ANZ Bank explained.  

Meanwhile, investors will now  await the Nonfarm Payrolls showdown on Friday. “Our expectation for  payrolls  should do little to assuage fears of a broader economic slowdown. Two weak ISM reports help to cement that US data momentum is on the ebb. This leaves the USD tactically vulnerable to sliding further as it runs rich against most of the G10,” analysts at TD Securities argued.

DJIA levels

The DJIA recovered from the 200-day moving average on Thursday despite a convincing close below the 50-DMA now in the prior session. The index had completed a 50% mean reversion of the August to recent swing highs that were located at 26379 that was guarding territory down to the session lows below the 26000. For now, the prospects of a run as far as the 38.2% Fibo retracement of late 2018 to YTD highs at 25223 and then a 50% mean reversion to the mid 24000s has been averted, for now. Bulls can target a run to the 50 and 21-DMA confluence  at the September lows-resistance line in the mid-26000’s.