Dow Jones Sharply Lower Amid Coronavirus Uncertainty
Dow Jones retreat from record levels after China reported 254 deaths and a rise in coronavirus confirmed cases of 15,152, after the province of Hubei applied a new classification system. World Health Organization (WHO) spokesman Jasarevic said the WHO is seeking more clarity from China on the updates to its case definition and reporting protocol. Now in total there are 60,362 cases, 1,369 deaths confirmed while 6,100 patients have recovered. Doubts raised among investors as to whether China administration will be able to contain the spread of the virus in the very near future. The uncertainty pressures risky assets and stocks across the board.
On the economic data front, the number of people applied for unemployment benefits in February rose slightly. Initial jobless claims increased by 2,000 to 205,000 in the week ended February 8. The previous reading was at 203,000, while the forecasts were at 210,000.
The CPI rose 0.1% in January on an adjusted basis, after rising 0.2% in December. In the last 12 months, the all items index increased 2.5% before seasonal adjustment. The CPI yearly reading came in at 2.3% (above the forecasts of 2.2%, the previous reading was at 2.3%.
Dow Jones gives up 0.53% at 29390 as the index corrects from record highs. Despite today’s pullback the outlook remains positive for the Dow Jones. Only a break below the 50-day moving average can cancel the recent bullish momentum.
On the downside, first resistance for the Dow Jones index stands at 29345 the daily low. In case of a further pullback the next support will be met at 29201 the low from February 11th. Next support area for the Dow Jones index would be met at 28990 the low from February 10th.
On the upside, initial resistance for the index will be met at 29,463 the daily high. The all-time highs at 29568.57 wll provide a strong supply zone. In case the index breaks higher next resistance will be met at 29.700 psychological mark.