Stocks plummeted midweek as weakness in manufacturing activities in Institute for Supply Management’s (ISM) manufacturing index fueled investor's fear about economy slowdown. Dow Jones Industrial Average lost more than 800 points in two days and reached the low of 26201 mid-day Thrusday. However, hope for interest rate cut from FED's October meeting turned the direction around and stocks recovered from large loss by the end of the week. For the week, S&P 500 index closed at 2952 down 0.33%, Dow Jones Industrial Average lost 0.92% while technology laden NASDAQ composite index increased 0.54%.
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| Weekly chart of S&P 500 index |
S&P 500 index went down for the 3rd week and is clearly in a downward decline. The index fell below the 2940 support and the 28 week moving average (trend line support) intra-week, but closed at 2950 above both support levels. As the momentum indicator of the index is also moving downwards, we expect the index to consolidate around its 28 week moving average for the next few weeks.
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