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LIVE MARKETS-Dow heads north, Nasdaq goes south

05/10/2021 10:20
LIVE MARKETS-Dow heads north, Nasdaq goes south

Major U.S. indexes mixed: Dow up to fresh record, Nasdaq slides

Energy leads S&P sector gainers; tech weakest group

Euro STOXX 600 index ~flat

Dollar ~flat; gold up, crude down

U.S. 10-Year Treasury yield ~1.56%

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DOW HEADS NORTH, NASDAQ GOES SOUTH (1010 EDT/1410 GMT)

Major U.S. indexes are mixed in early trade with the Dow Jones Industrial Average .DJI on track for a 4th straight record close, while the Nasdaq Composite .IXIC is losing more than 1% and threatening last week's lows.

This as optimism that interest rates would remain lower for longer lingered, while a surge in commodity prices lifted shares of miners, energy and steel companies. .N

Energy is the top performing S&P 500 .SPX sector after a cyberattack forced the shutdown of a U.S. fuel pipeline that transports nearly half of the East Coast's supplies, initially lifting oil prices. nL1N2MX059 That said, crude is now down on the day, and a 3-2-1 crack spread (Refinitiv data), a rough calculation of refining margins, after jumping more than 11%, to its highest level in more than a year, is now only up around 3% on the day:


FANGs .NYFANG, chips .SOX, and tech .SPLRCT are among the losers.

Here is where markets stand in early trade:



(Terence Gabriel)

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NASDAQ COMPOSITE: TOUGH TO BUILD ON A WEAK FOUNDATION (0900 EDT/1300 GMT)

The Nasdaq Composite .IXIC has broken down over the past several weeks. That said, as of Friday's close the tech-laden index is only off around 3% from its April 26 record close.

Of note, however, this weakness is in the wake of a severe breadth/momentum divergence:



Indeed, the Nasdaq McClellan Summation (McSum) .AD.O, a breadth/momentum measure based on advancing and declining issues, which hit an all-time high in mid-February, collapsed to its lowest level since early October, on April 22.

With the Composite's late-April strength, this measure failed to even exceed its high from earlier in that month. The McSum has since broken below its 10-day moving average again and is threatening its recent trough.

Just since late 2018, six significant Nasdaq selloffs, averaging around 16%, were preceded by McSum divergence. The McSum does have support in the -2,553/-2,598 area, but that zone is well below Friday's -1,910 close.

Thus, if the Composite continues to crumble under the surface, it may remain vulnerable to a more protracted and deeper decline. nL1N2MT14J


(Terence Gabriel)

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FOR MONDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE: nL1N2MX0UE








(Terence Gabriel is a Reuters market analyst. The views expressed are his own)