Late buying takes US stocks into the black for the day, adding to the gains logged this week as the bulls by the end of the week looked far more in control of things than they did at the beginning of it.
DJIA adds 39 (0.4%) to 10211, up 2.8% on the week, its best week since February. That helps erase most of that 4%-plus slide on last Friday and Monday and snaps a three-week losing streak. S&P 500 gains 5 (0.4%) to 1092, Nasdaq Comp rises 25 (1.1%) to 2244. NYSE volume is anemic at just over 4B shares. Stocks spent most of the day in the red, with a late buying spurt taking them into the black before the closing bell. Euro back around 1.21 level, and that helps the risk trade get its bearings back.
So the bulls have control, but they’re going to be pressed here to hold it, with a likely test coming at 1105 on the S&P 500. Remember, too, that the Dow’s three biggest rallies this year have come since April 26, when the current selloff began. Until the bull prove definitively they’ve taken control, all rallies must be suspect.
Also, today’s late rally came after more signs that the recovery is hitting a plateau, like this morning’s retail sales report, which came in far weaker than expected. The ECRI’s leading indicators index, which had been widely touted back when it was rising as a definitive indicator that the economy was recovering, turned negative for the first time in nearly a year.
“While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat,” said Lakshman Achuthan, ECRI director.
Give it a little while, guy. Let’s see where this one goes.