Dow Jones sheds weight again, heads for fourth straight loss

• The Dow Jones backslid another 0.9% at the low point on Thursday.
• Lopsided earnings reports have key equities tilted into the low side.
• The Dow is headed for its first losing week since August.

The Dow Jones Industrial Average (DJIA) trimmed further into the low end on Thursday, declining nearly 400 points at the bottom as uneven earnings figures dragged key stocks even lower. The major equity index has moderated to a more reasonable -150 points on the day, facing a 0.4% contraction from Thursday's opening bids.

US Purchasing Managers Index (PMI) figures came in broadly higher than expected, helping to bolster overall equities despite sharp declines in key Dow-listed stocks. US Manufacturing PMI activity figures rose to 47.8 in October, beating the expected 47.5 and climbing even further from August's 47.3. Meanwhile, the Services PMI component bounced to 55.3, climbing from the previous month's 55.2 and beating the expected decline to 55.0.

Dow Jones news

Despite the overall upbeat print in key US activity figures, the Dow Jones is getting dragged into the red by losses in key weighted players. Roughly two-thirds of the index is testing into the red on Thursday, but most losses are contained within key players in the tech space as the chipmaker rally continues to wobble.

IBM (IBM) fumbled the ball, declining over 6.5% and slipping below $218 per share after missing revenue forecasts in the third quarter. Honeywell (HON) also shed weight, falling 5% and easing under $210 per share after revenue, which grew over the period, failed to meet Wall Street expectations, prompting the company to lower year-end guidance.

Dow Jones price forecast

The Dow Jones Industrial Average (DJIA) daily chart reflects a bearish pullback after reaching a peak near 43600. The index has dropped to 42331.67, displaying a series of bearish candles as it approaches the 50-day EMA, currently at 41833.84. The 50-day EMA has provided support in the past, and it will be critical to monitor if this level holds once again. If it does, a potential bounce could see the price testing recent highs around 43600. On the other hand, if the 50-day EMA is breached, a more significant correction could be in play, with the next support target around the 200-day EMA at 39665.77.

The MACD indicator is signaling increasing bearish momentum. The MACD line has crossed below the signal line, and the histogram is deepening in negative territory. This confirms the weakening bullish sentiment and could suggest further downside in the short term. Traders should be cautious of additional bearish price action, especially if the DJIA fails to hold the 50-day EMA. A break below could accelerate selling pressure, with a deeper retracement towards the 200-day EMA in focus.

Dow Jones daily chart