Wall Street rallies on stronger than expected earnings, DJIA flips better bid (up 270 points on the day)

  • The Dow Jones Industrial Average (DJIA), put up 269.25 points, or 1%, to close at 26,412.30.
  • S&P 500 index climbed by 19.09 points, or 0.7%, to end at 2,907.41. 
  • The Nasdaq Composite Index added 36.80 points, or 0.5%, to finish up at 7,984.16.

Wall Street was sharply higher on Friday with investors cheering a strong set of bank earnings. JPMorgan’s quarterly results for the Dow component were better than expected and Wells Fargo & Co. followed, posted strong revenue and in-line earnings. For the DJIA, JPMorgan set the scene followed by Walt Disney Company which unveiled plans for its new streaming service, sending the price of stocks higher. The risk on sentiment sent US rates lower across the curve with the 10y yield climbed to its highest level in nearly a month (+6.3 to 2.56%). 

US data:

Import prices rose at a higher than expected pace in March (0.6% m/m vs 0.4% consensus) largely on the back of rising imported energy prices. The monthly increase took the y/y rate to flat from -1.6% in February. Then, UMich’s preliminary April consumer sentiment was a touch weaker than expected at 96.9 vs 98.2 consensus, down from 98.4 in March.

DJIA levels

From a technical perspective, there was a sharp turn around in price action. There is room to the top side in pursuit of the October highs but bulls will be fearful of overstretched momentum indicators in time.  On the flipside, the first key bearish target will be the 20-D SMA and 26000 ahead of the 25700s and then the 200-DMA guarding a break all the way down to 24800 gap area ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24200.


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