For the fourth straight day today, after last Wednesday’s downside washout, the markets decided that the path of least resistance was higher. The major indices are once again knocking on the doors of their all-time highs. The DOW gained 43 points today, the S&P 500 added 4, and the NASDAQ was higher by 5 points.

The DOW was led by gains in the financial sector plus CAT…and NKE after its recent collapse to yearly lows. Breadth numbers were positive at a 16/12 upside ratio and the VIX grudgingly ground itself lower to end at 10.72.  Stocks got a bit of a boost from Europe where the Purchasing Managers’ Survey rose to a six-year high.

With the earnings season just about over, the upside motivations have become more difficult especially with the ongoing investigations crippling the ability of the President to get his agenda moving forward. The release of the proposed budget today is going to meet resistance from various sections of the Congress.

Bond yields were up by a small amount to 2.27% for the 10-year Treasury Note. The dollar was a little stronger with the Euro down to 1.1202 and the Japanese yen at 111.55. Gold was a bit lower at $1,255 an ounce but crude oil continued to creep higher just ahead of the start of the summer driving season this weekend for Memorial Day.

This week sees the official end of the second-quarter reporting period. The retailers are bringing up the rear as usual. Tonight- INTU; Wednesday – TIF, NTAP, WSM, LOW; Thursday – DLTR, HOR, ANF, GME, DECK, ULTA, COST, BBY; Friday – BIG. With just about all of the S&P companies having reported, it looks like the profit gain was 15.3%…much better than initial estimates and the primary reason why the market has done so well  thus far this year.

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.