Stocks ended higher Thursday, driving the S&P 500 almost to breakeven year to date and the Dow Jones Industrial Average to a small profit for the year. But volume remained low as investors waited for the various global central banks to set a direction.
The major news of the day was that crude oil settled above $40 a barrel after selling in the low $20s just one month ago.
Investors continued to focus on the Federal Reserve’s statement that it would leave the fed funds rate unchanged and lower the projected path for future rate increases to just two this year.
The U.S. dollar fell 1.1% against a basket of currencies. Investors tend to embrace this development because it means U.S. goods can be sold at a lower price in overseas markets.
Gold jumped 2.9% to $1,264.50 an ounce. And the yield on the 10-year Treasury note fell to 1.91% from 1.94% on Wednesday as bond prices rose.
At Thursday’s close, the Dow Jones Industrial Average gained 156 points at 17,481, the S&P 500 rose 13 points to 2,041, the Nasdaq added 11 points at 4,775 and the Russell 2000 was up 17 points at 1,091.
The NYSE Composite’s primary exchange traded 1 billion shares with total volume of 4.5 billion. The Nasdaq crossed 1.9 billion shares. On the Big Board, advancers outpaced decliners by 3.9-to-1, and on the Nasdaq, advancers led by 2.2-to-1. Block trades on the NYSE increased to 6,232, up from 5,761 on Wednesday.
The Dow Jones Transportation Average has made a sharp-angled run within a narrow bullish channel. On Thursday, it pierced the 200-day moving average and is now in the heart of resistance. But even if the index manages to break the line at 8,260, it won’t necessarily hit a new high. The old high is at 9,310.22, made in November 2014.
The Dow Jones Industrial Average, however, could break to new highs if it can pierce the bearish resistance line at about 17,500. But volume is low and MACD flat.
One of our readers pointed out the long-term rounding top on the S&P 500. It’s not likely that average volume will turn this pattern, which began to form early in 2014.
Conclusion
As strong as the market may currently appear, it will probably not break to a new high. I’m certainly not clairvoyant, but experience tells me that it takes big buyers to move markets to new highs. I see little evidence to support a breakout from the current level.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
