Nasdaq, S&P 500 Close at All-Time Highs

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U.S. equities gapped higher at the open on Thursday, lifting the tech-heavy Nasdaq Composite to new record highs.

There was no specific catalysts for the rally. If anything, headwinds were in play as OPEC’s nine-month extension of last year’s production cap disappointed expectations for a deeper reduction in output and Wednesday’s Federal Reserve meeting minutes raised the specter of a June hike and a balance sheet taper in September.

Regardless of the motivation, the most popular mega-cap tech stocks led the way higher as the rest of the market — as represented by narrowing measures of market breadth — largely shrugged.

In the end, the Dow Jones Industrial Average gained 0.3%, the S&P 500 gained 0.4%, the Nasdaq Composite gained 0.7% and the Russell 2000 gained 0.1%. Treasury bonds were largely unchanged, the dollar moved higher, gold gained 0.3% and oil was slammed down 4.8% to close below the $50-a-barrel level. The drop in energy also ended a run of nine gains in the prior 10 sessions.

Volume was light, at 92% of the NYSE’s 30-day average, and breadth marginally positive with 1.1 advancers for every decliner.

No surprise then that energy stocks led the decliners, off 1.8%, with materials down 0.2%. Consumer discretionary and technology were the leaders, up 0.9% and 0.8% respectively.

Best Buy Co Inc (NYSE:BBY) exploded 21.5% higher after reporting a big Q1 earnings beat with revenues 3% ahead of estimates on strength in gaming. HP Inc (NYSE:HPQ) fell 3.4% after reporting in-line earnings on 7% revenue growth. While analysts were pleased with the results, valuations are trying and concerns around higher component costs were cited. General Motors Company (NYSE:GM) fell 1.8% after Bloomberg reported the company is being accused of allegedly using emissions “defeat’ devices in some diesel pickups.

Stepping back, the biggest news is that both Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) are closing in on the $1,000-a-share threshold, with AMZN hitting an intraday high of $999.00. You’re less likely to hear that the percentage of S&P 500 stocks in uptrends remains below 68% vs. a high of near 80% in early March. Or that the Citigroup Economic Surprise Index is at depths not seen since late 2015. Or that the Comey-Russia-FBI-Trump fiasco is going to return to the headlines next week. Or that the Federal Reserve is sounding remarkably hawkish lately.

Instead, the motivation for the latest surge, which is threatening to push the Dow Jones Industrial Average up and over its three-month flirtation with the 21,000 level, has been very odd surges in the overnight futures market tied to volatility in the Chinese markets.

This is far from a normal market.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/nasdaq-sp-500-close-at-all-time-highs/.

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