The longer a trading instrument stays in a trading range, the more violent the breach of that range is going to be. Finally, the bottom of the seven day trading gave way and there was major follow through to the downside.
The catalyst for the decline was the thrashing of two different stocks following their Q1 reports, which were not all that bad. However, what was said after the reports is what caused the steep declines.
Clearly, the banking sector is not out of the woods as First Republic Bank (NYSE: FRC) was cut in half (again) following unnerving comments during its conference call. Recession fears were renewed again as United Parcel Service (NYSE: UPS) cautioned that “volume remains under pressure due to current market conditions.” That instigated nearly a 10% decline in the issue, that many consider a bellwether for the economy.
The index had its worst day since March 22 by declining 66.25 handles at the closing price of 4093.25.
It should be noted that upbeat reports after the bell from Microsoft Corp (NASDAQ: MSFT) and Alphabet Inc. (NASDAQ: GOOG) has sparked a rally in the after hours. As a result, the last after-hours print was 16 handles above the close at 4109.25.
Flight-to-safety made Johsnon & Johnson (NYSE: JNJ) the biggest winner of the top components. For the session, the issue gained $1.50 or 0.92% at the closing price of $165.18.
That was over 2% better than the cash index’s decline of 1.59%.
Nvidia Corp (NASDAQ: NVDA) was the biggest loser of the top components of the index. For the session, the issue declined by $8.01 or 2.96%.
