With the Dow Jones Industrial Average and S&P 500 indices both falling below big, round numbers during Thursday’s trading session (12,000 and 1300, respectively), it’s perhaps a good sign for bulls that stocks were able to close above those levels.
But is anyone long stocks really feeling good about anything this week?
Stocks did make a valiant effort to break their two-day losing streak – and the Nasdaq did so – but were rebuffed to finish with a slight selloff.
The Dow finished 37 points lower to 12,069, while the S&P 500 slipped a point to 1306. The Nasdaq, which has led the market’s slide this week, showed some bounceback, finishing up 15 points to 2738..
However, not a lot of market “inputs” really changed on Thursday – investors were still eyeing developments in the Middle East, and especially, the price of oil, to decide how and whether to buy and sell.
On Thursday, the dynamic seemed to mostly be: oil prices up, stocks down – and vice-versa.
As has been the way this trading week has worked, it’s no coincidence at all that with oil prices falling officially by 0.8% throughout the day to nearly $97 a barrel, after hitting overnight highs of more than $103 a barrel, stocks were able to avoid a real emotional blow that would come from the Dow losing 12,000.
Small-caps were a rare bright spot, and perhaps dovetailed with the outperformance in tech stocks to show that investors were not completely turning their back on some amount of risk – yet.
On the other hand, tell that to bond investors, who saw the yield on the 10-year note fall to 3.44%, and have seen it fall in two weeks from above 3.7%.
Elsewhere, the news flow on Thursday didn’t really reassure investors who may be increasingly concerned about what higher fuel prices are going to do for consumers’ discretionary spending. Earnings reports from retailers Kohl’s (NYSE:KSS), Target (NYSE:TGT) and Sears (NASDAQ:SHLD) were mixed, while new home sales fell nearly 13% — worse-than-expected — in January from a month earlier.
Friday likely brings a decrease in trading volume and possibly less volatility than the market has experienced in the past three days — unless oil prices direct otherwise, that is.
