NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Retreat As Services PMI Drops Below 50

SP500

SP500 is under strong pressure as traders focus on weak economic reports. Services PMI declined from 52.9 in January to 49.7 in February, compared to analyst consensus of 53. Number below 50 show contraction. The surprising contraction in the services sector raised worries about the potential slowdown of the U.S. economy. The final reading of Michigan Consumer Sentiment report has also missed analyst expectations. Consumer Sentiment declined from 71.1 in January to 64.7 in February, compared to analyst forecast of 67.8. The report indicated that consumers feared that tariffs will boost prices. Year-ahead inflation expectations increased from 3.3% to 4.3%. The pullback was broad, and all market sectors moved lower in today’s trading session.

SP500 moved below the support at 6090 – 6100 and is trying to settle below the 6030 level. In case this attempt is successful, SP500 will head towards the support at 6000 – 6010.

NASDAQ

NASDAQ pulled back as traders reacted to economic reports. From a big picture point of view, traders rushed to take profits near historic highs.

NASDAQ managed to settle below the support at 21,900 – 21,950 and is moving towards the next support level, which is located in the 21,550 – 21,600 range. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in the near term.

Dow Jones

Dow Jones tests support at 43,500 – 43,600 as Unitedhealth Group is down by 6.6%. The stock suffered a sell-off as WSJ reported that DOJ was investigating Medicare billing practices. The company denied the report, but traders rushed to sell the stock.

If Dow Jones manages to settle below the 43,500 level, it will move towards the next support level, which is located in the 43,000 – 43,100 range. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

For a look at all of today’s economic events, check out our economic calendar.