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The S&P 500 Continues its Lethargic Upward Haul

As the indexes keep crawling higher, continue to exercise caution

By Sam Collins, InvestorPlace Chief Technical Analyst


On Tuesday, stocks closed higher for the fourth consecutive session. Financial stocks starred after lagging in the prior three sessions.

Morgan Stanley (NYSE:MS) and Goldman Sachs Group Inc (NYSE:GS) gained 1.9% and 1.6% respectively. And the sector led the S&P 500 with a gain of 0.6%. Eight of the S&P 500’s eleven sectors gained with just Real Estate, Materials and Consumer Discretionary showing losses. The latter was down 0.4%, dragged down by shares of AutoZone, Inc. (NYSE:AZO), which lost 12% following a decline in same-store sales and earnings that were lower than analysts’ estimates. Advanced Auto Parts, Inc. (NYSE:AAP) fell 4.6% due to the decline in AZO.

But in addition to strength in the financial stocks, energy stocks also gained due to an increase in July futures of 0.7% to $51.47 per barrel. Increasing optimism that OPEC will agree to extend cuts in production beyond June led to black gold’s fifth consecutive gain.

At the close, the Dow Jones Industrial Average gained 43 points to close at 20,938, the S&P 500 rose 4, closing at 2,398, the Nasdaq ended at 6,139 for a gain of 5 points, and the Russell 2000 added 4 at 1,381. The NYSE’s primary exchange traded 767 million shares with total volume of 3.2 billion shares, and the Nasdaq crossed 1.7 billion shares. On the Big Board, advancers outpaced decliners by 1.3-to-1, and on the Nasdaq, advancers led by a slight margin. Blocks on the NYSE fell to 6,885 from 7,028 on Monday.

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The S&P 500 Continues its Lethargic Upward Haul

Even though we could have desired more volume from yesterday’s Nasdaq advance, the junior index achieved several positives: First, and foremost, it closed the gap that opened last Wednesday from 6,139 to 6,123, and by doing so it confirmed the CBR Buy signal at about 6,000 and has advanced four consecutive sessions.

Conclusion: The S&P 500 is within sight of its all-time high at 2,406, as is the Nasdaq. But low volume and uninspiring breadth (almost even) should make us pause before jumping aboard. Perhaps it’s the international situation or politics: The cause of the market’s lethargy is not relevant. Earnings for Q1 were strong, but buyers are holding back. We should hesitate, too, since the lack of a green flag telling us to buy has not yet been waved.

EDITOR’S NOTE: Our Chief Technical Analyst Sam Collins is retiring on June 1. Your Daily Trader’s Alert emails will continue uninterrupted, but will feature new analysts going forward. To learn more about the changes click here, and to join our “online going-away party” and wish Sam farewell click here.

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.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/05/s-p-500-lethargic/.

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