October 4, 2022

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Mixed close on Wall Street - S&P 500 heads above key level

Mixed close on Wall Street – S&P 500 heads above key level

On Tuesday, retail giants Walmart and Home Depot released quarterly figures, which indicated, among other things, that consumer spending could remain high enough to keep the US economy from sliding into recession.

This news helped shape the rest of Wall Street, as it seemed most directional when the exchange closed at 10 p.m. NST:

  • The Dow Jones Industrial Average rose 0.73 percent
  • The Nasdaq tech stock fell 0.19%
  • The broad S&P 500 index rose 0.22 percent

In response to a Walmart report, which, among other things, reported an 8.4 percent increase in revenue to $152.9 billion in the second quarter, investors raised the stock by five percent on Tuesday. At the same time, the stock pulled a number of other commodity trading stocks in its wake. As the chart below shows, Walmart’s share has also navigated the stock market rally that has characterized the stock market over the past two months.

The S&P 500 Index rises

The S&P 500 index, which includes the 500 largest companies listed in the US, is now on its way above its 200-day moving average. CNBC.

If the index rises above this level, then this is a sign that the stock markets are on the way to an “bullish movement”, thus indicating another possible rally.

It’s an important test of a closely-watched moving average, often seen as a distinction between an uptrend and a downtrend, Ari Wald, who handles technical analysis for investment bank Oppenheimer, tells CNBC. He adds that it depends on how the market reacts:

The market may react with profit taking, but continued movement above the 200-day moving average indicates a strong buying interest in the stock market, Wald says.

Meanwhile, Andrew Simon of Morgan Stanley Investment Management believes that the recent price rally on stock exchanges is making the market look ripe for a short-term drop — the result, among other things, of hedging profits.

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