DOW JONES FALLS ON EARNINGS AND FED STATEMENT; FACTORY ORDERS OUTPERFORM
DJ 30 futures are currently trading at 26261- lower by 0.29% as compared to the previous close. The contract closed in the negative territory in the last trading session also.
In the Cash Markets, the DJIA fell about 135 points at the time of writing. U.S. equities dropped today as a fall in energy shares added to the gloom after the central bank dampened expectations of an interest rate cut this year.
The benchmark 10-year yield rose to 2.552%. Treasury yields and bank stocks rose after the Federal Reserve Chairman said that recently low inflation pressures may just be “transitory,” indicating that a rate cut may not be on the horizon.
Fed’s comments, however, sent stocks plunging on Wednesday, with the 30-stock index falling about 163 points on the day.
Shares of Apple inched down 0.30% after jumping as much as 6% on Tuesday when it reported better-than-expected earnings.
Microsoft lost 1.38%, falling for a second day after briefly touching $1 trillion market capitalization on better-than-expected earnings
Index-member Dow fell 5.49% after reporting first-quarter net sales that dropped 10% as compared to a year ago. Net Sales were, however, above the market expectation.
3M lost 1.31% after it announced to buy privately held wound-care company Acelity Inc. in a deal valued at $6.7 billion, including debt.
Stocks of Caterpillar fell 2.27% after it announced earlier today that it would raise its quarterly cash dividend by 20% to $1.03 per share.
Other top losers in the Dow Jones include Walt Disney (down 1.49%), Visa (down 0.94%), and Exxon Mobil Corp (down 1.14%) at the time of writing.
On the other hand, bank shares rose broadly on Thursday. Goldman Sachs was up 0.30% at the time of writing.
On the economic front, Initial Jobless Claims released earlier today came in at 230K in the week ended 27th April. Claims figure was above the market expectation of 220K.
In addition, Factory Orders (MoM) for March released earlier today came in at 1.9%. Orders growth was above the consensus estimates of 1%.
On the technical front, the RSI is currently at 46.22% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the middle line of the Bollinger Bands and is heading downwards.
Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Sell At 26275, Take Profit At 26175 Stop Loss At 26325