Stocks retrenched slightly Monday following Friday’s breakout in the major indices. This occurred despite a 2.9% jump in oil prices, as weakness in the health care and consumer discretionary sectors offset the 1.3% gain in energy stocks.
Oil’s advance was due to reports that some OPEC members are working out an agreement to freeze production. Notable gainers included Marathon Oil Corporation (NYSE:MRO), Chesapeake Energy Corporation (NYSE:CHK) and Murphy Oil Corporation (NYSE:MUR), as well as blue chips Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX).
Bristol-Myers Squibb Co (NYSE:BMY) continued to fall after the drug company’s announcement Friday that one of its cancer drugs failed in a clinical trial. In just two days, shares have lost almost 20%.
At Monday’s close, the Dow Jones Industrial Average lost 14 points at 18,529, the S&P 500 fell 2 points to 2,181, the Nasdaq dropped 8 points to 5,213, and the Russell 2000 was down a point at 1,230.
The NYSE Composite’s primary exchange traded 793 million shares with total volume of 3.3 billion. The Nasdaq crossed 1.6 billion shares. On the Big Board, advancers led decliners by 1.3-to-1, and on the Nasdaq, decliners were slightly ahead. Block trades on the NYSE fell to 4,713 from Friday’s total of 5,243.
On Friday, both mid caps, represented by the Nasdaq, and big caps, represented by the S&P 500, rose to new all-time closing highs. Thus, the bull market continues to outfox some of the most experienced investors on the Street of Dreams. Note that the S&P 500’s all-time high and closing high are nearly identical, an indication that the bull is still ready to charge to higher ground.
Conclusion
In one of the narrowest ranges of the year, the S&P 500 traded with a mere 8 points between its high and low on Monday. The saying “never sell a slow market” — especially following Friday’s spectacular breakout — applies.
We need a pause that refreshes, and it appears many traders took to the beaches or other vacation spots to find that refreshment. However, my guess is that once they fully comprehend the significance of Friday’s major breakout, they will be back in force. Let’s be there before they arrive.
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.
