On a day the Financial stocks actually showed some strength, Tech lagged along with several other sectors which weighed on the market for much of Wednesday’s session. More bad news from the housing sector also held back the early momentum the bulls had going on strong earnings reports from Tuesday night and yesterday morning.
Some of Tech’s best failed to power the market past resistance despite spanking Wall Street’s numbers. As usual, there were one or two bad apples which ruined the party but overall, the numbers have been solid.
Wall Street also took a step back after hearing June Existing Home Sales came in at 4.77 million units versus expectations for 4.93 million unit sales. The news was surprising, considering Tuesday’s Housing Starts came in at their highest levels of the year.
The bulls were also facing the next wave of resistance and following Tuesday’s pop we figured there might be a slight pullback as prior resistance was trying to hold as support. Finishing near the flat line was even better.
The Dow fell 15 points, or 0.1%, and settled at 12,571. The blue-chips kissed 12,603 which was right on our 12,600 target and will need a close above this level to confirm a push towards 12,800 is coming. The low was 12,546 and 12,350 still serves as short-term support.
The S&P dipped less than a point and closed at 1,325. The index traded to 1,330 at the open and tested this level in the afternoon which was just below the 1,334 target that needs to be cleared for a shot at 1,350. The bears managed a test down to 1,323 and support is still strong at 1,300.
The Nasdaq slipped a dozen points, or 0.4%, and finished at 2,814. Tech held the 2,800 level as it traded to a low of 2,808 after pushing 2,839 at the open. We mentioned resistance was strong at 2,850 and with the 52-week high at 2,887, the bulls will need a lot of firepower to past these levels.
One silver lining was that the S&P Volatility Index (^VIX, 19.09, down 0.12) stayed below 20 following Tuesday’s 8% drop.
Of course, the bulls have been bringing out the heavy artillery, being so close to resistance, and last night was no exception. Intel (INTC, $22.97, down $0.07) and Qualcomm (QCOM, up $57.30, up $0.32) both topped Wall Street’s expectations but the reaction in after-hours trading wasn’t too pleasant.
Shares of each company dropped 2% and 3%, respectively, which has carried over into this morning pre-market action. Not good, but we will see how the bulls deal with it.
Futures have been pointing towards a higher open since the sun cracked here on the Right Coast. As the heat wave across America gets hotter along with the hot seats in Congress over the debt bill, tensions are high which means we will continue to see some classic summer volatility.
As we head to press, Dow futures are higher by 68 points to 12,575 while the S&P futures are up 8 points to 1,330. The Nasdaq futures are showing a pop of 10 points to 2,392.