Stock Indices: Dow Jones falls for a second straight session on renewed Fed rate hike prospects

On Wednesday Dow Jones Industrial Average traded within the range of 17,486.27-17,588.81. The benchmark closed at 17,502.59, edging down 0.45% (79.98 points) on a daily basis. It has been the 16th drop in the past 37 trading days and also a second consecutive one. The daily low has been the lowest level since March 18th, when the Dow went down as low as 17,481.49. The blue-chip gauge has trimmed its advance to 5.98% so far during the current month, following a 0.30% gain in February.

Equities came under pressure by renewed prospects of a rate hike by the Fed, after the Federal Reserve President for Philadelphia, Patrick Harker, expressed his support of a more hawkish approach regarding policy. “I think we need to get on with it,” Harker told bond traders on Tuesday at the Money Marketeers of New York University’s conference on Growth and the Role of Economic Policies, “I am not a two (rate) rise person. This economy is really quite resilient to a lot of the headwinds so if that continues I would be supportive of another 25 basis point rise.” According to Harker, who is not a voting member of the FOMC this year, the central bank needs to consider a rate hike as early as its April 28th-29th meeting. A hike in borrowing costs tends to bolster the appeal of fixed-income assets on the account of stocks.

Among the companies included in the benchmark, 21 posted a daily decline on Wednesday and 9 posted a daily gain. Shares of Nike Inc (NKE) recorded the worst performance within the Dow on March 23rd, going down 3.79% to close at $62.44. It has been the 8th drop in the past 21 trading days and also the steepest one since February 5th. March 23rd low of $61.15 per share has been the lowest price level since March 15th, when a low of $60.35 was recorded. Nike shares have trimmed their advance to 1.38% so far in March, following three consecutive months of decline.

Caterpillar Inc (CAT) was the second worst performer within the DJIA yesterday, depreciating 2.48% to close at $73.68 per share. It has been the 7th drop in the past 21 trading days, a second consecutive one and also the sharpest one since March 8th. March 23rd low of $73.57 per share has been the lowest price level since March 17th, when a low of $73.52 was recorded. Caterpillar has cut its advance to 8.83% so far in March, following an 8.77% gain in the previous month.

At the same time, the shares of UnitedHealth Group Incorporated (UNH) registered the most notable daily increase within the DJIA on March 23rd, going up 1.38%, to close at $129.79, while marking their 12th gain in the past 22 trading days and also a fourth consecutive one. March 23rd high of $130.35 per share has been the highest price level in more than a year. UnitedHealth has added 8.98% to its value so far in March, following a 3.42% advance in February.

Visa Inc (V) was the second best performer within the Dow on Wednesday, appreciating 1.30%, to close at $73.91. It has been the 9th gain in the past 22 trading days and also the sharpest one since March 11th. March 23rd high of $74.17 per share has been the highest price level since March 4th, when a high of $74.25 was recorded. Visa has added 2.10% to its value so far during the current month, following three consecutive months of decline.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the Thursday pivot levels for DJIA are presented as follows:

R1 – 17,511.99
R2 – 17,521.39
R3 (range resistance) – 17,530.79
R4 (range breakout) – 17,558.99

S1 – 17,493.19
S2 – 17,483.79
S3 (range support) – 17,474.39
S4 (range breakout) – 17,446.19

By using the traditional method of calculation, the weekly pivot levels for DJIA are presented as follows:

Central Pivot Point – 17,447.74
R1 – 17,775.14
R2 – 17,947.97
R3 – 18,275.37

S1 – 17,274.91
S2 – 16,947.51
S3 – 16,774.68