S&P 500 Began to Recover After Sliding on Monday
S&P 500 began this week by sliding down below closely watched threshold. On Wednesday as Asian stock continued raising for third consecutive day, the indexes began to climb up.
On Monday, Wall Street ended lower as energy and healthcare shares lost ground. After last week gain, S&P 500 (SPX) dropped below 50-day moving average, indicating negative market sentiment losing 0.81% to 1,932.22.
San Antonio-based head trader at U.S. Global Investors Inc Michael Matousek told Reuters, "If stocks rally up to a declining 50-day average, people will sell against that." He also added, "From a psychological standpoint, you have that overhead resistance at that level."
Nine out of ten major sectors in S&P 500 index fell on Monday. Healthcare (SPXHC) was the worst with 1.58% decline triggered by 3.60% down of Amgen Inc (AMGN.O). Followed by Energy index (SPNY) that fell 1.16% in spite of increase of U.S. oil price. The only gainer was utilities index (.SPLRCU) with 0.2% up which was prompted by 1.34% upsurge of Edison International (EIX.N).
Other indexes also started the week low. Dow Jones industrial Average (DJI) was down 0.74% to 16,516.5 points, while Nasdaq Composite Index (IXIC) dropped 0.71% to 4,557.95.
Healthcare sectors were the worst losers in Monday's trading as Endo International (ENDP.O) plunged 21% and Valeant (VRX.N) slumped18.41%. Endo International was down following its revenue forecast that missed estimation, while drop of Valeant was triggered by delay in releasing its quarterly results.
On Tuesday, Market Watch reported the stocks rallied to close higher as investors targeting bank and technology stocks, which triggered by raise of oil price.
S&P 500 advanced 2.4% on Tuesday, closing at 1,978.35 led by gain in financial and technology stocks. Financials were up 3.5% led by Citigroup Inc (C) 2.30% surge and 0.64% of Prudential Financial Inc. (PRU). While technology 3.1% increase were contributed by Seagate Technology(STX) and Qorvo Inc. (QRVO) with 2.11% and 0.61% gain consecutively.
Tuesday also marked the recovery of energy sectors of S&P 500, led by Chesapeake Energy Corp. (CHK) with 23.19% increase. Followed by Range Resources Corp. (RRC) and Anadarko Petroleum Corp. (APC) with 10.57% and 6.33% increase.
While Dow Jones Industrial Average climbed 2.1%, or 348.58 points to close at 16,865.08 and Nasdaq Composite Index gained 2.9% or 131.65 points, closing at 4,689.60 recording its best gain since August.
On Wednesday, as Asian stocks continued its third day rally, market continued to rebound. However, S&P 500 slid 0.2% on closing after strong performance on Tuesday.
Chief market strategist at CMC Markets Asia Pacific Ltd Michael McCarthy told Bloomberg, "The rebound and reversal of momentum could see Asia Pacific markets add to yesterday's strong gains."
Although S&P 500 began this week below its threshold watched, but it started recover on Tuesday. Other indexes also began to climb, as Asian market continued to raise for three consecutive days on Wednesday.