The S&P 500 has recovered from initial losses in Thursday’s trading session, after the ISM Services PMI data surprised to the upside.
The Institute of Supply Management reports that the business conditions index in the U.S. services sector rose from 62.7 to 64.0, beating the market consensus number of 63.0.
This figure enabled the S&P 500 index to push up from intraday lows. The index now trades at 4198.68 or -0.11% on the day, having opened with a downside gap.
Earlier, the stellar ADP Employment Change and lower initial jobless claims had caused the index to open lower, as the data looks set to provoke talks on tapering by the Fed. But investors got some reassurance from the growth in economic activity in the U.S. services sector for the 12 consecutive month, a situation which sends the index to a record high.
Technical Levels to Watch
The lower open enabled the index to test the support posed by the neckline of the double bottom on the daily chart. A strong bounce has ensued, and the index looks set to close the downside gap.
The 4220.63 resistance remains the immediate barrier for bulls. A break of this area opens the way towards the current all-time high at 4238.04. Additional upside targets are found at 4260 (as per Credit Suisse) and 4301.0.
On the flip side, rejection and pullback from 4220.63 retests support at 4176.61, with the previous neckline expected to form a new support base at the 4150.37 pivot (19 April/21 May lows). 4120.48 and 4082.72 come into the picture if the decline is more extensive.