US stocks mixed on unchanged ECB and Facebook’s collapse
InvestingOnline.com
27/07/2018, 00:55Wall Street closed mixed on Thursday as investors digested ECB rate decision and a new wave of corporate earnings. Facebook closed its worst day ever.
S&P 500 index closed 8.63 points or 0.30% down in the day at 2,837.44. NASDAQ Composite declined 1.01% or 80.05 points to 7,852.18. On the other said, the Dow Jones Industrial Average rose 0.44% or 112.97 points to 25,527.07.
The European Central Bank decided to keep its interest rate unchanged at 0% and the deposit rate at -0.4% according to a press release published by the bank. Later on the day, ECB president Mario Draghi hinted that ECB’s rates would remain on hold at least until September 2019.
Draghi said, that “at this stage, we don’t see a need to modify forward guidance,” concerning possible interest rates changes.
He also commented on the trade war between the United States and the rest of the world, “a trade war where you have rounds of retaliation and rounds of responses would create an entirely different climate. We would have to assess both the direct effects, which may be significant as the numbers significantly go up and the indirect effects of confidence on – especially on business investment.”
The president also said that risks of financial market volatility remain high; Overall risks to growth are still broadly balanced.
Facebook performs its worst day ever
Facebook daily chart July 26
Facebook closed Thursday 19% down at 176.26, in a day that saw the Menlo Park giant losing $190 billion in market value. The worst day for FB shares in its history and one of the worst days for a publicly traded company in recent times.
Facebook reported a Q2 EPS of $1.74, better than expectations. Revenues rose 42.0% in the last year to $13.23 billion in the Q2; lower than expected.
The social media giant had 1.47 billion global daily active users in the second quarter, less than the 1.49 billion expected. However, average revenue per user was $5.97, more than the $5.95 expected.
After closing the day at 176.26, the share of Facebook naturally couldn’t fill the gap between Wednesday and Thursday. The pair is flirting with correction territory, but the market may want to wait for Friday’s Facebook performance.
To the upside, the pair needs to break above 180.00 and the 200-day moving average at 181.55. Then, selling zones are identified at 182.60, 186.00 and 192.00.
To the downside, supports are at 173.75, 170.80, and 168.90.
