Market Action – July 25, 2012

The US equity markets had a mixed performance on Wednesday July 25, 2012. Tuesday was a big down day continuing the trend that started on last Friday. During this time the S&P 500 lost -2.78%. The global equity markets also did not fare well and Global Dow index (GDOW) lost more than -4.00%.

Overnight’s global market performance was not encouraging but the S&P futures were nearing a near-term support level of the low established on July 12th so a bounce was on the cards. On Tuesday evening, the emini came close to breaking below this level but then turned up around 9:00 PM EDT. By the time the US session opened at 9:30 AM EDT, the futures were up by +2.50 points after going up as much as +6.50 at 8:30 AM.

The momentum however, did not carry on and the market dropped for the next couple of hours before making a U-turn at around 11:00 AM. Wednesday’s New Home Sales report came at 350K, which was below estimates of 372K and it did not help the sentiments and for the rest of the day S&P did not do very well and closed at 1337.89, down by -0.42.

Dow Jones Industrial Average, on the other hand had a positive day. Unlike S&P, It turned around 2:30 PM on Tuesday and its upward momentum held up better than S&P’s momentum. From the open it moved up and after a brief retracement in the late morning it made a new intra-day high only to falter little bit at the end – in sympathy with NASDAQ and S&P. It closed up by +58.73.

NASDAQ had a very strong down drag due the APPL’s earning miss. Its downward move started at the Monday’s close and continued through Tuesday. (Though it gapped down on Monday, it maintained an uptrend for rest of the day.) So Wednesday was going to be messy for it. However, along with S&P it too tried to make a turn-around late morning recovering part of the loss by 2:30 PM. But then it closed lower by -8.75 or -0.31%.


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