A choppy day on Wall Street ended mixed to slightly higher. Both financial and technology sectors outperformed their peers — the highlight of the day being the successful offering of $2 billion of trust preferred securities by Citigroup (C). The KBW Bank Index (BKX) rose 2.2%.
Google (GOOG) rose 2.9% following the conclusion of negotiations with the Chinese government regarding censorship of its Chinese sites. And Facet Biotech (FACT) received an offer from Abbott Labs (ABT) to acquire the company for $27 a share.
The rise in technology stocks led to a new 52-week high in Nasdaq the (NASD).
Wholesale inventories for January fell 0.2% when a gain of 0.2% was expected. Treasury prices fell 6/32 to yield 3.723% on the 10-year note.
At the close, the Dow Jones Industrial Average (DJI) was up 3 points to 10,567, the S&P 500 (SPX) rose 5 points to 1,146, and the Nasdaq gained 18 points to 2,359.
The NYSE traded 1.1 billion shares, and Nasdaq crossed 702 million shares. Both registered more advancers than decliners by 2-to-1.
April crude oil rose 60 cents to $82.09 a barrel, boosted by data that showed that the U.S. fuel supply is tightening while demand is increasing. The Energy Select Sector SPDR (XLE) rose 51 cents to $58.57.
The March gold contract fell $14.20 to $1,107.80 an ounce, and the PHLX Gold/Silver Sector Index (XAU) fell $2.39 to $165.83.
What the Markets Are Saying
The market is now just inching forward (except for Nasdaq), and volume is still very light. The Investor Intelligence Advisor Sentiment reporte yesterday showed that advisers have increased their bullishness for four consecutive weeks and now sit at 44.9% bullish and 23.6% bearish. This is a contra-indicator and not supportive of a major market advance from the current price levels.
Michael Ashbaugh of MarketWatch summarizes the current situation:
The case for the bulls: Some important indices have broken out including the Nasdaq, Dow Jones Transportation Average (DJT), Russell 2000 (RUT), and the S&P MidCap 400 Index (MID). Also, retailers and consumer discretionary names are hitting new highs. China is holding up well to significant resistance.
The case for the bears: The S&P 500 hasn’t broken out yet, the recent upturn has come on unusually light volume, and investor sentiment measures, like the CBOE Volatility Index (VIX), have reached complacent extremes.
As our readers know, I’m more in the camp of the short-term bears. I believe that the market will eventually break to new highs, but conclude from the data I see that even if the S&P 500 was to break to new highs it is unlikely that there would be strong follow-through.
Until the break occurs and vaults through resistance on high volume and strong breadth, it is likely that we will be trading within the current narrow zones of support for several more months.
Today’s Trading Landscape
Earnings to be reported before the opening include: Chemspec International, China Sunergy, Delek US Holdings, Imax, Jackson Hewitt, Metalico, NGP Capital Resources, Piedmont Natural Gas, Smithfield Foods, Stewart Enterprises, Sun Communities and The Buckle.
Earnings to be reported after the close: Aeropostale, Air Methods, Clear Channel Outdoor Holdings, GMX Resources, Goldcorp, HQ Sustainable Maritime Industries, Kodiak Oil & Gas, National Semiconductor, NPS Pharmaceuticals, Obagi Medical Products, Optimer Pharmaceuticals, Pacific Sunwear, Pall Corp, PowerSecure, Quiksilver, SeaChange, Shuffle Master, Smith & Wesson, Ulta Salon and Zumiez.
Economic reports due: international trade (the consensus expects -$41 billion), jobless claims (the consensus expects 460,000), EIA natural gas report, Fed balance sheet and money supply.
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