Market Talk

Okay, so yesterday the world was about to spin off its axis, the end-times were nigh, disaster seemed afoot. Even Charlie Sheen was putting on a credible stage show.

Today, not so much.

US stocks recover after yesterday’s sell-off, with Johnson & Johnson leading the Dow higher after a well-received earnings report. Given how quickly stocks shook off that S&P warning, which yesterday seemed a globe-rattling event, you wonder if yesterday’s sell-off in the stock market had as much to do with S&P’s report as it did with an overbought market.

DJIA gains 65 (0.5%) to 12267, S&P 500 rises 7 (0.6%) to 1313, Nasdaq Comp adds 10 (0.4%) to 2745. NYSE volume’s low. J&J, Caterpillar comprise about half of the Dow’s gains. J&J, Goldman both see earnings slide from a year ago, although the Street rewards the former and punishes the latter.

Gold touches $1,500, closes a hair beneath there. Crude’s above $108/barrel again. Yen remains pegged above 82 to the dollar, but watch if it breaks below there (moves down in the yen represent strengthening.) We’d be getting back to the range that sparked the yen’s wild March 16 rise and subsequent G7 intervention.

Slate of post-market earnings includes IBM, Yahoo and Intel.

Despite the recovery today, the technical damage yesterday was material, as our colleague Tomi Kilgore points out:

The S&P 500′s bounce was encouraging for bulls, but it didn’t quite erase the negative overhang created by Monday’s tumble. The S&P 500 up 7 at 1313, but below resistance at the 50-day moving average (currently at 1315). While the index stays below the 50-day MA on a closing basis, the preferred stance will be sell on rallies, as Monday’s slide stirred up technical chatter about a possible longer-term “double-top” reversal pattern (February top of 1344, April top of 1339). That won’t be confirmed unless the index falls below the March low (1249), but the longer the index closes below the 50-day MA, the more likely it becomes.

Now, for sheer lunacy, absolutely nothing tops this story from the Orlando Sentinel about a central Florida unemployment bureau and its latest plan to, well, fight unemployment: they’re giving out “superhero” capes.

It sounds like a bad Saturday Night Live sketch, but we’re not kidding. Here’s the website of the Workforce Central Florida, which launched a marketing campaign to “help us fight Dr. Evil Unemployment.” It’d be hysterical if it wasn’t so sad. Nothing quite says “we’ve hit the wall” than this effort.

Lackluster earnings results from Google last night and BofA this morning don’t bother investors much, as US stocks look to open generally flat to a shade lower, based on indications from equity futures.

Markets currently modestly higher in Europe, while stocks were mostly lower in Asia overnight. We’ll get some sense of how much higher producer prices are feeding through to consumers with release of March CPI at 8:30 a.m. ET.

New York Fed’s April Empire State manufacturing survey also set for 8:30 a.m.; March industrial production & capacity utilization due at 9:15 a.m.; and Thomson Reuters/Univ of Michigan prelim April consumer sentiment at 9:55 a.m.

S&P futures down 3.60, DJ futures down 34. Ten-year note higher, yield at 3.47%. Crude floating around the $108/barrel mark.

Meanwhile, our colleague Dave Benoit sums up all the news surrounding Bank of America this morning:

Bank of America (BAC) announces a whole lot of news all at once this morning. A quick summation: $2 billion in earnings, at 17c a share misses expectations of 27c a share. But revenue beats. Deposit-group and investment-bank earnings are both down from year ago, the latter sharply from strong 2010. And CFO Chuck Noski is out, moving to a vice chairman role in a company with a separate chairman and CEO already. He’ll be replaced by chief risk officer Bruce Thompson. Chief counsel is also changed. The 2010 year of rebuilding appears to be continuing into 2011. BAC is paring bigger premarket losses minutes earlier, with shares now up 0.8% at $13.23.

US stocks rise, even after Portugal comes out and says it’ll be the third European nation to seek an international bailout.

DJIA rises 33 (0.3%) to 12427; yes, it’s another fresh multi-year high, S&P 500 gains 3 (0.2%) to 1336, Nasdaq Comp adds 9 (0.3%) to 2799.82. Volume’s a bit weak.

There wasn’t much in the way of hard news most of the day, but that serves bulls just fine. They’re buying just about everything. Gold hits a fresh record. Crude hits a fresh multi-year high. Even cotton’s rebounded.

Market shows little initial reaction to Portugal’s admission that it will follow Greece and Ireland in seeking a bailout. It can’t be a good thing that a third European nation is seeking international help because it can’t handle its problems on its own. But the even bigger issue is that everybody, and we mean ev-ree-bo-dee, is already looking past Portugal to its neighbor on the Iberian Peninsula — Spain.

Meanwhile, the Nasdaq Comp continues to flirt with the 2800 level. Our colleague, Tomi Kilgore, penned the following missive:

The fifth time wasn’t the charm for the Nasdaq Composite. Including today, the index has traded above 2800 intraday for the third time in four sessions, and the fifth time since Feb. 22, without closing above it. The Nasdaq ended up 8.63 at 2799.82, off an intraday high of 2815.55. Even if 2800 is cleared, bulls have to contend with nearby resistance within the gap in the charts between the Feb. 18 low and the Feb. 22 high (2808-2824), followed by the Feb. 18 high of 2840.41. Meanwhile, support starts at 2750-2765, which includes the gap between the March 29 high and March 30 low and the 50-day moving average.

The headlines tomorrow will be all about the major U.S. stock indexes posting their best first-quarter in more than a decade (and their second best ever.) It’ll make for some great bullish-sounding soundbites, and the fact that stocks are up at all given all the craziness of the 1Q is a testament to…something. But while it’s true, of course — the numbers don’t lie — it misses so much.

Just two weeks ago, the S&P 500 and Nasdaq Comp were in the red on the year, negative, down, losing ground, and the DJIA was a couple dozen points away from joining them. Now, they didn’t just rebound, they rebounded sharply, almost violently, in the face of a constant stream of bad news. Kind of makes you wonder what’s really going on, doesn’t it?

DJIA slips 31 points today (0.3%) to 12320, after Fed’s Kockerlakota suggests rate hikes could come later this year; still the index gains about 6.4% on the quarter. S&P 500 loses 2 to close the quarter at 1326. Nasdaq Comp adds 4 to 2781. Again, too, NYSE volume is low, like it’s been this entire rally. Volume equals validity, as the say on the Street, but there hasn’t been much validity in this rally.

Stocks were hardly breathing through most of today, but that late speech from the Minneapolis Fed chief Kockerlakota — suggesting rate hikes could possibly come later this year — sends markets down. So in addition to all the attention on the jobs report tomorrow, everybody’s going to be scrambling to recalculate their equations about when rate hikes are coming.

The difference between a fed funds rate of zero and 1% doesn’t mean much to the vast public — remember, it was that 1% rate that sparked the housing bubble — but it means a lot to traders, who have made a lot of money off that zero rate.

US stocks rally yet again, with the Dow logging its eighth gain in the past 10 sessions, as investors seize upon signs of improvement in the jobs market.

DJIA jumps 72 (0.6%) to 12351, within hailing distance of its year high; S&P 500 rises 9 (0.7%) to 1328, Nasdaq Comp gains 20 (0.7%) to 2777. NYSE volume again low. Stocks may have run into technical resistance, with the 1330-area a resistance level for the S&P 500. Still, the three major indexes have all risen for the eight of the past 10 sessions, and the S&P’s two smaller indexes, the 600 smallcap and 400 midcap, are faring even better. The former is at its highest since October 2007, and the latter is at its highest ever.

Also, the Russell 2000 is 15 points away from its all-time high from July 2007. Are we feeling bubbly yet?

ADP pegs March jobs growth at 201,000, and while this report can diverge sharply from official government numbers, it’s enough to get the market excited — and it’s in a pretty excitable mood anyway these days. Of course, the big report comes Friday from Uncle Sam, and of course, that big report will be revised next month, and revised again, and revised again in a year.

But data points always provide a trading opportunity for the market, no matter the bigger picture. What the economy needs more than one data point is a sustained level of both job and wage growth. When you see those two things on a sustained basis, you can start to talk about having some real confidence in the economy.

The mood around the globe remains positive for stocks, with strong gains in Tokyo and Hong Kong overnight, and European markets currently adding to recent gains.

London and Paris trying to make it six straight positive sessions and nine of last ten. DJIA closed yesterday at its highest level in six weeks.

US stocks have performed well during the weeks leading into quarterly earnings periods as investors anticipate strong results, and we’re entering that zone right now.

Thin day for data, just ADP’s gauge of March private payrolls due at 8:15am ET. The big check-processor pegged February’s jobs growth at 201,000, a shade below expectations of 205,000. The problem is ADP’s numbers have shown some wild divergences with the government report that’ll come Friday, but it is directionally at least a positive.

S&P futures up 6.30, DJ futures up 48. Ten-year note’s down to 3.48% after hitting 3.50% earlier this morning. Crude futures are a bit lower at $104.62/barrel.

Meanwhile, DJ’s Tomi Kilgore notes stocks are looking at something of a breakout:

Dow industrials set to open above the pivotal 12250-12285 resistance range that capped the index the previous three sessions, and in five of the first seven of the month. Getting through it intraday is one thing, but it’s not a clear breakout unless the DJIA closes above it. If it does, a move above the Feb. 18 intraday high (12391) would be a formality, and bulls will start talking about the May 2008 highs around 13130. If the DJIA falls back within that range, however, a test of the 50-day moving average (12097) becomes likely.

Stocks are showing a bit of strength, but not much. Meanwhile, crude’s showing a bit of weakness — but not much (and lately is creeping back toward $105/barrel.) But bigger than both of those may be the prices in the cocoa market, what with Easter coming up and all.

After a big run-up in last week, putting equities back in bullish territory by some measures, stocks globally are taking a break today with the end of the quarter looming.

Asian stocks were slightly lower and Europe is little changed; S&P futures are up 1.50 points, DJ futures up 11.

February personal income and spending data are on the docket at 8:30 a.m. EDT. Meanwhile, US Treasurys are continuing their losing streak, which would be an eighth straight session of declines if they finish down again, with the 10-year yield just below 3.5%.

Oil is slightly lower, with Nymex crude edging below $105/barrel, and the euro is holding above $1.40.

Hard not to marvel at the US stock market’s ongoing ability to rally amid an array of potential setbacks.

Oil above $105/barrel and record low monthly new-home sales were just a couple obstacles easily hurdled by bulls today. Concerns about Portugal’s debt problems also proved no match for rallying stocks, though the “no” vote on austerity measures came out just as the market was closing (it did weigh on the euro, which slipped under $1.40.)

Materials sector leads stocks higher, followed by consumer discretionary (again, shrugging off oil’s run-up) and tech stocks.

DJIA rises 67 to 12086, and Nasdaq Comp adds 14 to 2698. S&P 500 ends almost 4 points higher at 1297. NYSE volume was just about on the daily average around 4.2 billion shares traded; until the late surge in the last hour, the pace was weaker.

That makes the Dow a winner in four of the last five sessions, taking it to its highest close since March 9, before the Japanese earthquake. The S&P and Nasdaq are also up four of the past five sessions.

Stocks and oil weren’t the only gainers. Gold rose for a sixth consecutive session, to a fresh record high of $1.437 an ounce. Silver, too, was up sharply, finishing over $37 an ounce, its highest close since February 1980 (think the Hunt Brothers.)

“Now the DJIA’s peeking above the 50-day moving average (12053), which has capped the index’s rally the previous two sessions,” Dow Jones’ Tomi Kilgore writes:

Meanwhile, the DJIA is still below the extension of an uptrend line starting at the August lows, which currently comes in around 12200. Since it was the break of this trendline that contributed to last week’s mini-market tumble, it would take a close back above the line to clear the negative technical overhang.

For the S&P 500, the uptrend line resumes around 1340.

The bulls will be gunning for that 12000 level, you can count on that.

Is fear dominating the conversation a bit too much? Ryan Detrick of Schaeffer’s Investors Research thinks so.