Wall Street closes lower on Friday, although DJIA briefly traded above its record closing high

  • Dow scores weekly gain of 2.4%; but wilts into the close
  • S&P 500 books 2.2% weekly advance, also lower on the session.
  • Nasdaq logs 3% gain over 5-day trading period, dropping 0.2% on the day. 

Following an initial advance, Wall Street benchmarks wobbled into the close on Friday as U.S. data misses the mark and geopolitical tensions flare up further. The Dow Jones Industrial Average, DJIA, lost 34 points, or 0.1%, to 26,719 while the Nasdaq Composite dropped 0.2% to 8,032. The S&P 500 SPX, -0.13% was down 0.1% to around 2,951, a day after finishing at an all-time high.

As for US data,  IHS Markit flash manufacturing purchasing managers index in June fell to 50.1 from 50.5 in May; This was the worst reading since September 2009 and startled investors. Meanwhile, the service sector also weakened in June;  Services PMI edging lower to 50.7 from 50.9. “Business activity edged closer to stagnation in June, expanding at the slowest rate since February 2016 and rounding off a second quarter in which the survey data point to the pace of economic expansion slipping to 1.4%,” Chris Williamson, Chief Business Economist at the IHS Markit commented following the release of teh data. Other data released today in the US showed that Existing Home sales rose 2.5% in May. 

On the geopolitical front, the intensifying tensions over the Middle East conflict between the US and Iran are keeping the markets on red alert while U.S. continues to blame Tehran for the tanker and drone attacks. Then trade wars remain at the top of the list of concerns as investors await to see if Trump and Chinese President Xi Jinping will indeed make any headway when they get together at the Group of 20 meeting next week.

DJIA levels

The Dow briefly traded above its record closing high and bulls remain in control with another advance on Friday. However, the index was falling just shy of the 26951 Oct 2018 highs and a break there opens the 27000 psychological level. On the flipside, below 26500, the prior sideways consolidating above the 61.8% Fibo retracement level of April to June swing highs and lows guard 25984 and then a 50% mean reversion of the current range to the 257940s.

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