- The Dow Jones continues its turnaround as uncertainties surrounding a potential interest rate reduction in June contribute to a rise in Treasury yields.
- The latest data on US Factory Orders and JOLTS Job openings support the notion of a smooth and uninterrupted trajectory for the US economy.
- The healthcare industry is experiencing significant declines due to underwhelming Medicare rates, which have left investors disappointed.
Tuesday is the second consecutive day that the primary Wall Street indices have declined. The Dow Jones Industrial Average (DJIA) is currently in the lead due to the robust data released by JOLTS Jobs Opening and US Factory Orders yesterday.
In February, product orders placed in the United States experienced a growth of 1.4%, which was higher than the forecast of a 1% increase and a rebound from a previous decline of 3.8%. Additionally, there has been an increase in the number of job openings, which has increased from 8.748 million to 8.756 million, surpassing the level of 8.74 million that was anticipated by the market.
Despite the fact that the most recent data from the United States confirms the optimistic outlook for the economy of the United States and a competitive job market, conditions that could be better for initiating a reduction in the costs of borrowing money are prevalent. Loreta Mester, the President of the Federal Reserve Bank of Cleveland, stated on Tuesday that she believes there will be a reduction in interest rates within the year.
She still needs to provide specific details regarding the timing of these proposed reductions. This has resulted in an increase in yields in the United States as well as the value of the United States dollar, while equity markets are reporting losses as investors reduce their expectations of a rate cut in June.
The Latest Dow Jones News
During the morning trading session on Tuesday, the Dow Jones Index experienced a decrease of 1.20 percent, reaching a level of 39,094. There has been a significant drop of 1.98 percent in the Health sector, which is experiencing substantial losses. This is because there have been reports that indicate that the administration of Vice President Joe Biden has not lived up to the expectations of investors regarding the increase in Medicare rates.
One and a half percent of the Consumer Discretionary sector is experiencing a decline. Energy and utilities are the only two sectors that trade higher than their opening levels, with gains of 0.53% and 0.24%, respectively, in the energy sector.
On Tuesday, United Health Group (UNH) experienced a significant decline, with its stock price falling by 8% to $450.35. This was recorded as a substantial decline. After that comes Intel (INTC), which is currently trading at $43.60, which is a decrease of 2.06% from its opening price.
On the bright side, Dow Inc. (DOW) gained 0.84% and reached $58.70, while Verizon Communications (VZ) also increased slightly by 0.1% and reached $42.35. Both of these companies are examples of positive developments.
The Technical Prognosis for the Dow Jones
According to the technical analysis, the Dow Jones Index is currently going through a correction in the direction of a downward movement. At the same time, the overall bullish trend is not being affected by this.
At 39,300, the price movement has surpassed the 50% Fibonacci retracement level of the previous rally that occurred in March. The price movement reached this level. It is currently moving in the direction of the support area, which is approximately 39,000. A level of support for the trendline can be found at 38,835, which is located lower down.
Fortunately, the support level that was mentioned earlier, which is located at 39,300, has the potential to act as a barrier at this time, therefore preventing any further movement towards the critical zone, which is located at 40,000.