U.S. equities bounced back from early losses on Thursday to finish near the unchanged line ahead of the three-day Easter holiday weekend. Markets will be closed on Friday.
News flow was light as attention remains focused on recent hawkish commentary from Federal Reserve officials and renewed weakness in crude oil on a lack of progress toward an OPEC/Russia supply freeze deal amid rising Iranian output, a slowdown in global demand growth and swelling inventories.
In the end, the Dow Jones Industrial Average gained 0.1%, the S&P 500 lost a fraction, the Nasdaq Composite gained 0.1% and the Russell 2000 pulled off a 0.4% gain.
Treasury bonds weakened, the dollar was little changed, gold lost 0.6%, and crude oil lost 0.6% to close at $39.55 a barrel. That boosted the ProShares UltraShort Crude Oil (NYSEARCA:SCO) recommended to Edge subscribers on Wednesday to a gain of 1.1% — with further gains likely as oil futures test their 20-day moving average for the first time since February.
Financial stocks led the laggards today, falling 0.7% as a group while defensive telecoms led the advancers with a 1% gain. TiVo Inc. (NASDAQ:TIVO) gained 23.4% after the New York Times reported the company is in merger talks with Rovi Corporation (NASDAQ:ROVI).
Homebuilder KB Home (NYSE:KBH) gained 6.3% after reporting a top- and bottom-line beat for the fiscal first quarter. Paypal Holdings Inc (NASDAQ:PYPL) dropped 4% after Re/code reported it is likely Apple Pay will be available for in-browser payments on mobile devices by the holiday shopping season.
On the economic front, durable goods orders fell 2.8% month-over-month while core orders fell 1.8%, well below expectations for a 0.5% decline. Initial weekly jobless claims came in at 265,000, below the consensus estimate and marking the 55th consecutive streak below 300,000 — the longest since 1973.
And the Atlanta Fed downgraded its Q1 GDPNow forecast to just 1.4% from 1.9% previously.
On a technical basis, the story remains the same: Large-cap stocks are contending with serious overhead resistance just as the Fed starts talking up the risk of an April rate hike and oil prices weaken.
Watch, in the weeks to come, for a possible return to support near the 16,000 level on the Dow.
Keep an eye out of for short-side opportunities such as Netflix, Inc. (NASDAQ:NFLX), which is dropping away from a month long topping pattern near $100 to end a two-month uptrend pattern. I have recommended the April $95 NFLX puts to my Edge Pro subscribers.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
