by Sam Collins | May 17, 2013 2:00 am
Comments from a non-voting member of the Federal Reserve, who said he is open to “trimming” the Feds’ bond-buying program, sent stocks lower on Thursday. The fall broke a four-session streak of gains for the S&P 500 and ended the record of nine closing highs in 10 days.
Nine of the 10 S&P 500 sectors closed in the red — the lone exception being technology. The tech sector’s advance was due to an earnings surprise from Cisco Systems (NASDAQ:CSCO) and gains from Apple (NASDAQ:AAPL) and IBM (NYSE:IBM). But the biotech sector sagged on profit-taking.
Economic reports were dismal. Housing starts fell 16.5% in April, initial job claims jumped to 360,000 versus analysts’ expectations of 330,000, and the CPI fell 0.4% in April where analysts had expected a 0.2% decline.
At Thursday’s close, the Dow Jones Industrial Average was off 42 points to 15,233, the S&P 500 fell 8 points to 1,650, and the Nasdaq was down 6 points at 3,465. The NYSE traded 683 million shares and the Nasdaq crossed 440 million. On the Big Board, decliners were ahead of advancers by 1.5-to-1, and on the Nasdaq, decliners were ahead by 1.3-to-1.
The latest new highs by the Dow industrials and transports were made on Wednesday. The move higher was a confirmation on the same day of a Dow Theory bull market buy signal. And yet there was hardly any mention of it in the press.
Never in my over 45 years in the investment business have I seen such a lack of enthusiasm for one of the biggest, boldest bull markets in history. Even the major institutions talk down the potential for higher prices.
The unvarnished reason for the advance is that the world’s central banks, led by our Fed, are plugging billions of dollars into the banks, and thus the economy. But even a big headline story late Thursday from The Wall Street Journal failed to halt the advance. Yes, the Dow fell 42 points… big deal!
By now everyone recognizes the tests put out by the Fed, which are meant to gauge market and/or public response to the threat of easing back on QE programs. They have come so frequently that the market has learned to ignore lines like, “Federal Reserve might tap the brakes on its efforts to stimulate growth.”
What a joke — the statement was made in the face of some of the worst economic data this year, thus the chances are that there will be no “tap” but continued pressure on the accelerator of bond purchases.
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.
Source URL: https://investorplace.com/2013/05/daily-stock-market-news-in-my-45-years-in-the-market-i-have-never-seen-anything-like-this/
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