(Bloomberg) -- With a dismal open, the S&P 500 Index again tested its 200-day moving average as first-quarter earnings reports failed to reignite the market.
The line held.
The S&P 500 slumped as much as 0.8 percent Wednesday -- putting it within four points of the average -- before paring losses. Until this year’s correction, the benchmark for U.S. equities had rarely traded anywhere near the 200-day line since the British vote to leave the European Union roiled global markets in 2016.
Bulls had looked toward earnings as a potential stimulant, but cautious guidance from stalwarts including Caterpillar Inc. stoked a market selloff Tuesday afternoon.
“It has so far been the catalyst for a decline that could be taking it down to retest its 2018 lows,” Matt Maley, an equity strategist at Miller Tabak & Co., wrote in a research note.
While there’s a lot of focus on the 200-day moving average, a break below it “would only be a yellow flag for the market,” Maley said. “It would take a meaningful close below those 2018 closing lows to turn it into a red one.”
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