Dow Jones Industrial Average Survives Tuesday

Who would have thought that the string of record-high closing levels for the Russell 2000 Index would end on a day when the Dow Jones Industrial Average finished in positive territory?

Disappointing earnings reports from a number of companies ended the latest winning streak for the S&P 500, after several companies, including Travelers Insurance (TRV) failed to meet expectations.

On the Nasdaq, Netflix (NFLX) beat the earnings and revenue numbers, but failed to enlist enough new subscribers to satisfy analysts, causing the stock to fall 4.47 percent.

Widespread fear that Apple (AAPL) would miss earnings expectations with its report after the close, took its toll on a number of tech stocks. Flash memory producer SanDisk (SNDK) sank 2 percent through no fault of its own. After finishing Tuesday’s session with a 1.72 percent loss, Apple beat expectations and rebounded in after-hours trading with a 3.46 percent gain.

The Dow Jones Industrial Average (DIA) picked up 22 points to finish Tuesday’s trading session at 15,567 for a 0.14 percent advance. The S&P 500 (SPY) retreated 0.19 percent to close at 1,692.

The Nasdaq 100 (QQQ) sank 0.78 percent to finish at 3,031. The Russell 2000 (IWM) declined 0.11 percent to end the day at 1,052.

In other major markets, oil (USO) advanced 0.45 percent to close at $38.09.

On London’s ICE Futures Europe Exchange, September futures for Brent crude oil advanced by 28 cents (0.26 percent) to $108.43/bbl. (BNO).

August Gold Futures advanced by $9.60 (0.72 percent) to $1,345.60 per ounce (GLD).

Transports struck an overpass on Tuesday, with the Dow Jones Transportation Average (IYT) falling 0.93 percent.

In Japan, stocks made a strong advance after the nation’s Cabinet Office released its monthly economic assessment, which stated that the Japanese economy “is picking up steadily and shows some movement on the way to recovery”. The Nikkei 225 Stock Average surged 0.82 percent to 14,778 (EWJ).

Stocks made enormous gains in China after Premier Li Keqiang asserted that the nation’s “bottom line for economic growth” is 7 percent. He went on to assure the country that this minimum would be sustained. The nation’s railroad stocks led the advance on expectations of increased infrastructure spending. The Shanghai Composite Index soared 1.95 percent to close at 2,043 (FXI). Hong Kong’s Hang Seng Index skyrocketed 2.33 percent to finish the session at 21,915 (EWH).

European stocks began Tuesday’s session with solid gains as a result of the news from China (VGK). Spain helped boost investor enthusiasm after the nation’s central bank reported a “less bad” second quarter GDP decline of only 0.1 percent, compared to the first quarter’s 0.5 percent. Although it was the eighth consecutive quarter of economic contraction for Spain, the big step toward economic expansion sent Spanish stocks into outer space (EWP). Nevertheless, the major European stock indices faded into the red during the final two hours of the session, despite a report from the European Commission that consumer confidence in the Eurozone hit a 23-month high. Sobering commentary that the reading was still far below the historic average helped dampen investor enthusiasm.

The Euro STOXX 50 Index finished Tuesday’s session with a 0.09 percent dip to 2,722 – remaining above its 50-day moving average of 2,696. Its Relative Strength Index is 58.45 (FEZ).

Technical indicators reveal that the S&P 500 remained above its 50-day moving average of 1,642 after finishing Tuesday’s session with a 0.19 percent decline to 1,692. At this point, bears are hoping to see the formation of a head-and-shoulders pattern on the S&P chart. Its Relative Strength Index declined from 69.12 to 67.29. Both the MACD and the signal line remain above the zero line, suggesting a continued advance, although the MACD is now on a level trajectory.

For Tuesday, most sectors were in negative territory, except for the materials, energy and utilities sectors. The technology sector trailed the group, falling 0.41 percent.

Consumer Discretionary (XLY): -0.13%

Technology: (XLK): -0.41%

Industrials (XLI): -0.07%

Materials: (XLB): +0.30%

Energy (XLE): +0.17%

Financials: (XLF): -0.38%

Utilities (XLU): +0.25%

Health Care: (XLV): -0.35%

Consumer Staples (XLP): -0.19%

Bottom line: The long streak of record-high closes for the Russell 2000 Index and the latest streak of record-high closes for the S&P 500 finally ended on a day when the Dow made it to the closing bell with a 22-point advance.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.