NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Remain Under Pressure As Unemployment Rate Jumps To New Highs

SP500

SP500 is losing ground as traders react to job market data. The Non Farm Payrolls report for October indicated that the economy lost 105,000 jobs, compared to analyst forecast of +55,000. In November, the economy added 64,000 jobs, exceeding the analyst consensus of +50,000. Overall, the Non Farm Payrolls data missed expectations and showed that the economy lost jobs in two previous months. Unemployment Rate increased from 4.4% to 4.6%, compared to analyst forecast of 4.4%. Today, traders also had a chance to take a look at flash PMI reports for December. Manufacturing PMI declined from 52.2 in November to 51.8 in December, compared to analyst forecast of 52. Services PMI has also missed analyst estimates, declinding from 54.2 to 53.0. Numbers above 50 show expansion. The market reaction to jobs reports and PMI data was choppy as traders focused on the potential reaction from the Fed. The weak job market may ultimately serve as a bullish catalyst for stocks as Fed may be forced to cut rates to provide additional support to the economy.

The nearest support level for SP500 is located in the 6750 – 6760 range. A move below the 6750 level will open the way to the test of the support at 6665 – 6675.

NASDAQ

NASDAQ was mostly flat as traders have started to buy the dip. NASDAQ did not manage to settle below the nearest support at 24,800 – 24,850 and is moving towards the resistance level at 25,200 – 25,250.

In case NASDAQ settles back above the 25,250 level, it will head towards the 50 MA at 25,539. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Dow Jones

Dow Jones pulled back amid falling demand for healthcare stocks. Merck, Unitedhealth Group, and Johnson & Johnson were the biggest losers in the Dow Jones index today.

A successful test of the support at 47,900 – 48,000 will open the way to the test of the next support level at 47,100 – 47,200.

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