After yesterday’s terrific upside day, the DOW fell for the ninth time out of the past 10 sessions. On the other hand, the NASDAQ has continued to do very well, propelled higher again by new best-ever levels in two stocks that have been somewhat unstoppable this week: AMZN and PCLN. A newly revitalized GOOG is also helping the NASDAQ go higher. The S&P has been caught somewhere in the middle. Earnings today gave a boost to the shares of RH and SONC while PLAY was lower for the same reason. At the end of the day, the DOW dropped 42 points, the S&P gained 2 and the NASDAQ finished 22 points higher.
News was on the light side today, except for the ongoing political drama going on in Washington, D.C. over the future of health care and the potential for tax reform and infrastructure spending. We await the heavy start of the earnings season for the first-quarter in two weeks. In the meantime it would appear that things will continue to drift in pre-existing ranges established over the past several weeks.
There was one economic report today that seemed to be of no consequence: February pending home sales rose by 5.5%. This was the best gain in almost a year and could be interpreted as adding to a positive overall economic background.
Breadth numbers were positive at a 17/12 upside ratio. This ratio is a function of both the more heavily populated NASDAQ and the Russell 2000 Index of small stocks doing a little better. The upside leaders today were the energy stocks; higher as a function of U.S. inventory levels showing a decline, thereby increasing demand. Crude oil prices have risen to $49.60 a barrel. On the other hand, the financials, which have finally shown some upside yesterday, were back to their losing ways today.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.