U.S. markets closed Wednesday’s session at their lowest levels since August as a weaker-than-expected report on private employers’ hiring stoked ongoing fears that economic growth is slowing. Technical indicators also played a major role in the overall weakness with the major indexes testing key support levels and round psychological numbers.
Volatility rose to its highest levels in a month and is confirming additional risk for the market with a number of major economic reports due out the rest of the week.
The S&P 500 stumbled 1.8% after tapping a 2nd half low of 2,874. Prior and upper support at 2,875-2,850 was breached but held with a move below the latter and the 200-day moving average signaling additional weakness towards 2,825-2,800.
The Dow skidded 1.9% after tapping an intraday low of 25,974. Major support at the 26,000 level was breached but held with a close below 25,800 and the 200-day moving average opening up risk towards 25,600-25,400.
The Nasdaq sank 1.6% following the midday back-test to 7,744. Late August and upper support at 7,750-7,700 held with a close below the latter and the 200-day moving average getting 7,650-7,600 in focus.
The Russell 2000 gave back 1% following the intraday plunge to 1,469. Early September and lower support at 1,480-1,470 was stretched but held with a move below 1,465 getting the late August low at 1,450 in play.
There was no sector strength for the 2nd-straight session. Energy was the weakest sector after tanking 2.5%, while Financials and Consumer Staples fell 2%.