US OPEN: Wall Street starts the second quarter with declines

• Number of new coronavirus cases rose in the US
• U.S. stock markets  trading lower at the opening
• Caterpillar (CAT.US) extends gains

 

US indices open today’ trading session lower extending yesterday’s losses despite better than expected ADP and ISM manufacturing reports. Investor's sentiment worsened after President Donald Trump’s warning that the next few weeks will be very painful for the US nation and  the death toll could reach 100,00 to 240,000.

 

The sudden shift in rhetoric’s is associated with the sharp increase of confirmed coronavirus cases in the US which reached almost 190,000  more than double those reported by China.  Investors remain concerned whether the massive fiscal stimulus will be enough to offset the negative impact of the coronavirus on the US economy.

 

S&P500 (US500) managed to broke below the key resistance at 2505 pts and given the current uncertainty which prevails on the markets, further downside remains likely. The next support support is located at 2395.3 pts. Source: xStation5

 

HP (HPE.US) — The technology company’s shares went down 1% in extended trading after Xerox announced that it is withdrawing from plans to acquire HP due to ongoing concerns and market turmoil caused by the spread of the coronavirus across the world. Initial offer from Xerox was rejected by HP, therefore in February Xerox increased its offer to $24 per share, which would have valued HP at approximately $34 billion.

HP (HPE.US) share price bounced off major resistance at $10.52 per share and as long as the price sits below it, the continuation of a downward trend looks more probable. The local support level can be found at $7.41 per share. Source:xStation5

 

Caterpillar (CAT.US) – the heavy equipment maker announced that in order to reduce expenses will withhold annual salary increases for executives, managers, and salaried employees. The company announced that will also not pay out bonuses to employees next year amid the coronavirus outbreak.

Caterpillar (CAT.US) – share price soared recently and is heading towards important resistance level at $119.10 per share in an attempt to close the bearish gap. Breaking above this level may lead to a bigger upward movement towards next resistance at $130.10 which is additionally strengthen by 200 MA (red line). Source:xStation5

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