On Wednesday, the Dow Jones Industrial Average declined while the other major stock indices advanced.
The Dow Jones Industrial Average was the only major American stock index to finish in the red on Wednesday, repeating the situation we observed on Tuesday. An revenue shortfall by International Business Machines, (IBM) sent Big Blue sinking 3.28 percent to $182.25. Although the company beat its $6.00 quarterly earnings estimate by 13 cents, its revenue fell short of the $28.26 billion estimate, by reaching only as high as $27.20 billion.
The Dow Jones Industrial Average (DIA) lost 41 points to finish Wednesday’s trading session at 16,373 for a 0.25 percent decline. The S&P 500 (SPY) advanced 0.06 percent to close at 1,844.
The Nasdaq 100 (QQQ) rose 0.28 percent to finish at 3,627. The Russell 2000 (IWM) climbed 0.47 percent to end the day at 1,181.
In other major markets, oil (USO) soared 1.68 percent to close at $34.56.
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced $1.43 (1.34 percent) to $108.16/bbl. (BNO).
February gold futures declined $5.70 (0.46 percent) to $1,236.10 per ounce (GLD).
Transports continued their voyage to deep space on Wednesday, as the Dow Jones Transportation Average climbed 1.06 percent to a new, record-high close at 7,548.56 (IYT).
In Japan, stocks made a slight advance after the Bank of Japan decided to maintain its monetary policy of expanding the monetary base by approximately 65 billion yen. The exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks faded as the yen strengthened, although the Nikkei 225 Stock Average climbed higher toward the end of the day as the yen weakened to 104.47 per dollar during Wednesday’s trading session in Tokyo. A weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average advanced 0.16 percent to 15,820 (EWJ).
Stocks made another huge advance in mainland China after Tuesday’s move by the People’s Bank of China to pump the equivalent of $42 billion into the money market. On Wednesday, the seven-day reverse repurchase rate, a measure of interbank funding ability, dropped 0.19 percent. The Shanghai Composite Index jumped 2.16 percent to 2,051 (FXI). Hong Kong’s Hang Seng Index advanced 0.21 percent to 23,082 (EWH).
In Europe, stocks made a slight decline following the resignation of Mohamed El-Erian from PIMCO. Although PIMCO operates autonomously, it has been a subsidiary of Germany’s Allianz SE since 2000. The Euro STOXX 50 Index dipped 0.06 percent to 3,151 – remaining above its 50-day moving average of 3,057. Its Relative Strength Index is 63.04 (FEZ).
Technical indicators revealed that the S&P 500 climbed further above its 50-day moving average of 1,810 after advancing 0.06 percent to finish Wednesday’s trading session at 1,844. Its Relative Strength Index rose from 58.51 to 58.94. The MACD is now on a slightly descending trajectory, just below the signal line, which would suggest that the S&P could decline during the immediate future.
On Wednesday, most sectors advanced except for the technology and materials sectors, while the consumer staples sector remained unchanged.
Consumer Discretionary (XLY): +0.26%
Technology: (XLK): -0.11%
Industrials (XLI): +0.31%
Materials: (XLB): -0.97%
Energy (XLE): +0.46%
Financials: (XLF): +0.05%
Utilities (XLU): +0.10%
Health Care: (XLV): +0.09%
Consumer Staples (XLP): unchanged
Bottom line: Once again, the Dow Jones Industrial Average failed to keep up with its peers, as the only index to finish the trading session in the red, thanks to IBM.
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