Dow Jones Wobble As Bank Earnings Point to a Bleak Earnings Season

Dow Jones
Dow Jones

The Dow Jones index wobbled in early trading as investors continued to react to corporate earnings.

Quarterly results by Blackrock showed that the company’s revenue rose by 11% year-over-year basis to more than $3.7 billion. This was driven by fees related to its $35 billion worth of inflows during the quarter. Technology revenue rose by 34%. However, the profit was 23% lower than in the same quarter a year ago.

Results from Morgan Stanley showed that its net income rose to $1.7 billion or $1.01 per share. This income was 30% below where it was last year. Revenue, on the other hand rose to $9.49 billion. The company’s results were supported by its trading division, which generated $2.42 billion. This was $200 million higher than what analysts were expecting. It was offset by a 1% decline of investment banking revenue, which slipped by 1% to $1.14 billion.

The gains in the Dow Jones came from Microsoft, whose stock rose by more than 1.8%. It was followed by Verizon, Apple, Merck, and Pfizer. The main laggards were Intel, Boeing, and Exxon, which dropped by more than 2%.

The Dow Jones is also reacting to the negative jobless claims data and the industrial production that was released yesterday.

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Dow Jones Technical Outlook

On the four-hour chart, the Dow Jones has found some significant resistance around the 50% Fibonacci Retracement level. This Fibonacci was drawn by connecting the year-to-date high and low. The pair has also been forming an ascending triangle pattern, which appears to be close to its peak.

In addition, the price appears to be exiting the Ichimoku cloud, which is usually a bullish signal. Therefore, in the short-term, the index may maintain the bullish trend if it manages to break past the resistance level of $23,977. This means that it may retest the psychological level of $24,000, which it tested on March 11.

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