The markets started the week lower, by and large there just wasn’t a lot of conviction on the part of either buyers or sellers. Amid a dormant economic calendar, stocks spent time on both sides of the flat line, but never put a whole lot of distance between themselves and that point for most of the day; only to limp to a soft close after ceding small gains.
The Dow Jones Industrial Average fell 19 points (0.1%) to 15,335, the S&P 500 Index declined 1 point (0.1%) to 1,666, after climbing four straight weeks, and the Nasdaq Composite lost 3 points (0.1%) to 3,496. Energy stocks were the day’s top gainers in the S&P 500 while consumer staples were the biggest underperformers. The S&P energy sector index rose 1.3 percent. In contrast, the S&P consumer staples index fell 1 percent.
The lack of conviction was owed in part to a lack of stirring catalysts. Presumably, some hesitation ahead of Fed Chairman Bernanke’s testimony before Congress on Wednesday about the economic outlook played a part in today’s mixed market. The consensus on the Street believes the Fed is more likely to begin tapering its bond purchases later this year…
After more than four years of anchoring short-term interest rates at zero and holding down long-term yields with its quantitative easing program, the Fed is signaling that it may soon begin the long process of returning the interest rate markets back to “normal”—where the markets determine yields, rather than yields being heavily manipulated influenced by the Fed.
There was some M&A activity, which included Yahoo buying Tumblr for $1.1 billion in cash as Chief Executive Officer Marissa Mayer seeks to lure users and advertisers with her priciest acquisition to date. Mayer is betting that Tumblr will help transform Yahoo into a hip destination in the era of social networking, as she challenges Google Inc. and Facebook Inc. in the $17.7 billion display ad market. Vista Equity Partners bought Websense for $1.0 billion cash and Actavis acquiring Warner Chilcott in an $8.5 billion stock deal. Those transactions, though, didn’t have market-moving punch.
Tomorrow’s economic calendar will remain dormant, but the rest of the week will be dominated by several housing reports and will also include durable goods orders. However, the Street is likely to focus on Wednesday’s testimony by Fed Chief Bernanke, as well as the release of the minutes from the last Federal Open Market Committee meeting later that day. There are worries that a big correction might happen following these coming news.
Our Trend Tracking Indexes (TTIs) slipped ever so slightly with the Domestic TTI stopping at +5.02% and the International TTI pulling back to +10.61%.
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