Good morning, SPX is trading at 1509 at the moment above 1500 resistance. It is also trading above upper TL as it is broken above the resistance today. Yesterday, I commented on DOW showing strength noting that it is trading above upper TL resistance.
It seems that SPX is heading to SPX 1550 target, as noted before, I didn't see a top for ST/IT yet. I changed my market sentiment from bearish during Dec2006-Feb2007 to bullish as I saw a bottom on March 05.
At what point will you change your sentiment/bias if you were bearish?
4:10 pm : The market strung together another winning session, aided by some tantalizing merger speculation, a 2.0% drop in oil prices and an April employment report that didn’t contain any bearish surprises.
In fact, the jobs report, which showed an 88K increase in nonfarm payrolls, the slowest gain in more than two years, was very much in line with expectations. The one positive surprise was the 0.2% increase in hourly earnings. That calmed inflation fears as that took the year-over-year rate down to 3.7% from 4.0%.
For the most part, though, the jobs data seemed to take a backseat to speculative reports that Microsoft (MSFT 30.56, -0.41) may be trying to work a deal to acquire Yahoo! (YHOO 30.98, +2.80). Both companies said they don’t comment on rumors, yet that news, and confirmation from Reuters (RTRSY 74.76, +15.84) that it received a takeover approach from a third party, helped keep the market’s bullish momentum intact.
The drop in oil prices, which was attributed to a belief that supplies will be adequate to meet demand, also offered a measure of support. That pullback, however, undercut an early rally in the energy sector (-0.10%) which was one of only two economic sectors to end the day with a loss.
Sector moves were limited in scope on both the upside and downside. That point is borne out in the tight range between the worst-performing sector (energy; -0.10%) and the best-performing sector (+0.60%), which was materials.
In today’s session, outsized moves were restricted to individual stocks like Yahoo! and CROCS (CROX 68.85, +11.44) which were driven by company-specific news. In the case of CROCS, it delivered a blowout report that was replete with upside guidance and a 2-for-1 stock split announcement.
The Dow, once again, finished at a new all-time closing high.DJ30 +23.24 NASDAQ +6.69 SP500 +3.23 NASDAQ Dec/Adv/Vol 1445/1600/2.16 bln NYSE Dec/Adv/Vol 1401/1800/1.36 bln
3:30 pm : Still no signs of buckling as the indices are inching their way higher into the close.
The energy sector (+0.1%), which was the strongest performer earlier in the day, has ceded that position in the wake of a 2.0% decline in oil prices.
The latter has been a welcome site for the airlines, which comprise one of today's best-performing industry groups.DJ30 +28.20 NASDAQ +430 SP500 +3.53 NASDAQ Dec/Adv/Vol 1437/1572/1.89 bln NYSE Dec/Adv/Vol 1435/1740/1.17 bln
3:00 pm : The market is entering the final hour of what has been another impressive week of trading. Today's gains are negligible, but they are noteworthy nonetheless since they reflect a market that seems impervious to selling activity.
Just about all factors have worked in its favor today, from M&A news to earnings results to a drop in oil prices. It wouldn't surprise us if there were some final hour profit taking, but the way things have gone for the better part of the past five weeks, we wouldn't bet on it.DJ30 +12.10 NASDAQ +1.54 SP500 +1.82 NASDAQ Dec/Adv/Vol 1474/1527/1.74 bln NYSE Dec/Adv/Vol 1411/1745/1.01 bln
2:25 pm : The indices remain confined to tight trading ranges as the conviction on the part of buyers and sellers has been lacking.
The FOMC meeting is next week's key event, but there will also be some important economic data out in the form of the PPI and Retail Sales reports. Both will be released next Friday.
Next week also brings another full slate of earnings with noteowrthy companis such as Disney (DIS), Cisco (CSCO), AIG (AIG) and CVS/Caremark (CVS) on the docket.DJ30 +6.74 NASDAQ +2.06 SP500 +1.73 NASDAQ Dec/Adv/Vol 1508/1459/1.61 bln NYSE Dec/Adv/Vol 1439/1705/987 mln
1:55 pm : The market is plugging through the afternoon session, unbowed by seliing interest but largely unmoved from where it was at the time of our last comment.
The bulls certainly can't be faulted for feeling a bit exhausted at this juncture when taking into account how far the Dow and the other major indices have come since the start of April.
Thus far, the "sell in May and go away" idiom has been little more than historical hot air.DJ30 +14.79 NASDAQ +3.64 SP500 +3.01 NASDAQ Dec/Adv/Vol 1404/1543/1.47 bln NYSE Dec/Adv/Vol 1353/1753/909 mln
1:30 pm : The market continues to hold its head above water as sellers have been unable to gain any traction to this point.
A drop in oil prices and thoughts that next week will feature additional M&A activity of note are among the items working to support the market today.
In looking to next week, the key event will be the FOMC meeting on Wednesday. The market isn't expecting a rate cut, but per usual, there will be significant attention paid to the wording of the accompany policy directive as participants will be looking for some insight into the likely course of monetary policy.DJ30 +18.85 NASDAQ +5.83 SP500 +3.17 NASDAQ Dec/Adv/Vol 1397/1519/1.39 bln NYSE Dec/Adv/Vol 1358/1757/832 mln
1:00 pm : The indices have regrouped from a bout of profit taking and are all trading in positive territory again.
A noticeable drop in oil prices (-$1.38 at $61.81) on the June contract has provided an added dose of support for the market today which has already been helped along by M&A news and reassuring economic data.
The pullback in oil is being attributed to the notion that supplies will be adequate to meet demand. With today's drop, June crude futurs are down nearly 7.0% for the week.DJ30 +12.92 NASDAQ +4.14 SP500 +2.64 NASDAQ Dec/Adv/Vol 1440/1458/1.29 bln NYSE Dec/Adv/Vol 1497/1604/752 mln
12:30 pm : The market has encountered a bout of selling interest that has robbed the Dow and Nasdaq of their earlier gains. Altogether the market is mixed and basically flat for the session.
There wasn't a specific news catalyst for the recent pullback, as it is simply a case of profit taking. Entering today's session the Dow was up 0.9% for the week after gaining 5.7% in April.
the pullback, like the earlier advance, has been orderly and broad-based.DJ30 -6.34 NASDAQ -1.95 SP500 +0.38 NASDAQ Dec/Adv/Vol 1356/1519/1.11 bln NYSE Dec/Adv/Vol 1226/1825/647 mln
12:00 pm : The makings of another bullish day of trading were planted for the market before the opening bell even rang. A report in the New York Post that Microsoft (MSFT 30.49, -0.48) has allegedly approached Yahoo! (YHOO 33.12, +4.94) about entering formal negotiations, and an April employment report that didn't contain any bearish surprises, served as the main sources of support to keep buying interest alive.
In addition to the Microsoft-Yahoo! speculation, Reuters Group (RTRSY 73.51, +14.59) did in fact confirm that it has received a takeover approach from a third party that may or may not culminate in an actual offer.
The two M&A stories put a bullish bid in the futures market even before the April jobs report was released. The latter didn't do anything to disrupt that bid as the report, in aggregate, had a positive spin to it in the sense that all components were essentially in line or better than the market expected.
Nonfarm payrolls rose 88K, slightly below the consensus estimate, but the unemployment rate and the average workweek were right on the mark at 4.5% and 33.8. A positive surprise was found in hourly earnings, which were up 0.2% (3.7% yr/yr) versus an expectation for a 0.3% gain.
While payrolls grew at their slowest pace in more than two years, the takeaway from the report was that it continued to point to a moderating economy with reasonably constrained inflation. Importantly, it didn't raise any concerns about the possibility of another rate hike.
Comforted by the data, the market sported modest, but broad-based, gains throughout the morning session. The energy, health care and technology sectors have provided an influential leadership base.
All ten economic sectors are on positive ground at the moment, yet most of today's big movers are limited to individual stocks like Yahoo! and CROCS (CROX 67.72, +10.31), which have been affected by company-specific news. CROCS for its part delivered a blowout earnings report replete with upside guidance and news of a 2-for-1 stock split.DJ30 +28.85 NASDAQ +9.17 SP500 +4.96 NASDAQ Dec/Adv/Vol 1268/1596/988 mln NYSE Dec/Adv/Vol 1191/1833/556 mln
11:30 am : The major indices remain in positive territory, but they haven't shown a lot of giddy-up today.
We suspect the advance is being constrained somewhat by an expectation that a pullback in the market is inevitable following a run for the Dow over the past month or so that has not been seen since 1929!
In any event, there hasn't been a rush to sell either as the prospect of more M&A activity come Monday and an appreciation for good, old-fashioned momentum have kept sellers at bay.DJ30 +22.43 NASDAQ +7.70 SP500 +4.45 NASDAQ Dec/Adv/Vol 1214/1599/822 mln NYSE Dec/Adv/Vol 1032/1954/432 mln
11:00 am : The market continues to sport modest gains as sellers have been fairly passive to this point.
M&A activity, and an April employment report that didn't contain any bearish surprises, have served as today's buying catalysts.
Not surprisingly, the dealmaking has spawned a number of rumors today regarding other possible buyout targets. The idea that Monday will be accented by another round of M&A news is apt to serve as a source of support for the market as the day continues.DJ30 +37.14 NASDAQ +11.72 SP500 +7.02 NASDAQ Dec/Adv/Vol 1202/1539/672 mln NYSE Dec/Adv/Vol 993/1941/337 mln
10:30 am : Early gains are being extended in a deliberate fashion. At the moment, participation is broad-based from a sector standpoint with telecom services (unch) trailing the pack.
Energy (+0.9%), materials (+0.7%), health care (+0.7%) and technology (+0.5%) are setting today's pace and are providing a strong base of leadership.
Microsoft (MSFT 30.54, -0.43) is getting pinched by its alleged standing as an interested acquirer of Yahoo! (YHOO 33.19, +5.01) and is currently the Dow's worst-performing component on the session.DJ30 +37.38 NASDAQ +11.95 SP500 +7.25 NASDAQ Dec/Adv/Vol 1160/1498/491 mln NYSE Dec/Adv/Vol 1005/1834/220 mln
10:00 am : The stock market is colored with modest gains in the early-going, and in accordance with its recent behavior, it has shown resilience to selling efforts.
There aren't any notable movers from a sector standpoint, as today's big winners are found mostly among individual stocks like Yahoo! (YHOO 33.13, +4.95), Weyerhauser (WY 84.00, +5.85), and CROCS (CROX 66.77, +9.36) which are running on company-specific news.
In the case of Yahoo!, that news relates to speculation it is a buyout target for Microsoft. The other two companies, meanwhile, shared reassuring news related to an asset sale and earnings, respectively.
09:40 am : The market moved higher at the open as expected, but the early gains weren't nearly as robust as one might have expected based on futures trading.
Clearly, there is still a long way to go in today's trading, but an underlying expectation that the market is due for a pullback of some sort may be serving as an early restraint for buyers.
For the time being, the Nasdaq has the performance edge as it is getting an added boost from the M&A speculation that surrounds Microsoft (MSFT 30.47, -0.50) and Yahoo! (YHOO 32.80, +4.62).DJ30 -6.18 NASDAQ +3.21 SP500 +1.74
09:15 am : S&P futures vs fair value: +6.0. Nasdaq futures vs fair value: +8.8. The futures market is off its morning highs, but not by much as the combination of a reassuring employment report and M&A activity - both rumored and confirmed - has kept this week's bullish bias intact. While the jobs report, in aggregate, has been viewed as a positive, it should be noted that the 88K gain in nonfarm payrolls is the weakest gain in more than two years.
08:51 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +10.0.
08:36 am : S&P futures vs fair value: +6.7. Nasdaq futures vs fair value: +12.0. April payrolls checked in up 88K, slightly below consensus, but the unemployment rate and the average workweek were right on the mark at 4.5% and 33.8. A positive surprise was found in hourly earnings, which were up 0.2% (3.7% yr/yr) versus an expectation for a 0.3% gain. This is the type of report that will once again elicit mention of Goldilocks, as it was neither too hot nor too cold to pique any meaningful concern about the pace of economic activity or the potential for another rate hike. In brief, it was a good report for the stock market.
08:14 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +10.2.
07:57 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +9.0. The market is sporting a bullish bias ahead of the April employment report at 08:30 ET, underpinned by more M&A news that includes a New York Post article saying Microsoft (MSFT) has approached Yahoo (YHOO) again about entering formal negotiations. Separately, Reuters (RTRSY) confirmed it has received a takeover approach from a third party. These items, combined with a reassuring earnings report from Starbucks (SBUX), have fostered the carryover buying interest.
06:16 am : S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +8.0.
06:15 am : FTSE...6591.80...+54.00...+0.8%. DAX...7498.60...+21.91...+0.3%.
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