NASDAQ Index, SP500, Dow Jones Analysis – Stocks Pull Back As Traders Take Profits Near Yearly Highs

Key Insights

• SP500 pulled back towards the 4550 level as traders used the initial reaction to the strong economic data as an opportunity to exit their positions at attractive levels.
• NASDAQ declined towards the 15,500 level amid profit-taking.
• Dow Jones retreated after an unsuccessful attempt to settle above 35,550.

SP500

SP500 pulled back from yearly highs as traders decided to take some profits off the table after the release of strong economic data. GDP Growth Rate increased to 2.4% in the second quarter, compared to analyst consensus of +1.8%. Initial Jobless Claims decreased from 228,000 to 221,000. Durable Goods Orders grew by 4.7% month-over-month in June, while analysts expected that they would increase by just 1%. The strong reports pushed Treasury yields to new highs. The yield of 10-year Treasuries settled above the 4.00% level, while the yield of 2-year Treasuries tested the 4.95% level. Stocks from the rate-sensitive sectors like Utilities and Real Estate have found themsleves under material pressure in today’s trading session.

From the technical point of view, SP500 failed to settle above the resistance at 4575 – 4600 and is moving lower. The nearest support level is located in the 4430 – 4450 range, so SP500 has a good chance to gain additional downside momentum.

NASDAQ

NASDAQ has also pulled back as traders focused on profit-taking. Meta, which is up by 5%, provided some support to the index, although NASDAQ has recently moved into the negative territory.

NASDAQ is heading towards the support at 15,200 – 15,300. If NASDAQ settles below 15,300, it will move towards the next support level, which is located in the 14,560 – 14,680 area.

Dow Jones

Dow Jones moved lower after an unsuccessful attempt to settle above the 35,550 level. The pullback was led by Honeywell, which was down by 5% despite beating earnings estimates.

If Dow Jones declines below the 50 MA at 35,200, it will head towards the support level in the 35,000 – 35,100 range.

For a look at all of today’s economic events, check out our economic calendar.