US STOCKS-Wall St flat as ISM data offsets Ukraine concern

NEW YORK, May 5 (Reuters) - U.S. stocks were little changed on Monday, as upbeat economic data was offset by concerns over an escalation of tensions between Ukraine and pro-Russia separatists.

Equities initially opened lower, weighed by geopolitical events as Ukrainian forces were ambushed by separatists on Monday, triggering heavy fighting on the outskirts of the rebel stronghold of Slaviansk, a day after a Ukrainian police station in Odessa was stormed.

But equities rebounded after the Institute for Supply Management said its services sector index rose to 55.2 in April, the fastest pace in eight months, from 53.1 in March, topping expectations for a read of 54.1.

"It's more confirmation the economy is strengthening and we are headed for stronger growth," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"Unfortunately, we had those headlines out of Ukraine where the situation seems to be escalating but once the market realized the economy is doing better, we saw the snapback."

Bank shares were under pressure, weighed by a 2.1 percent drop in JPMorgan Chase to $54.43. The bank said late on Friday it expects second-quarter revenue from bond and equity trading to decline by about 20 percent from a year earlier. The S&P financial index fell 0.5 percent.

Energy shares were among the best performers, with the S&P energy index up 0.5 percent.

Occidental Petroleum, the fourth-largest U.S. oil and gas company, reported a better-than-expected profit for the third straight quarter, helped by higher prices for crude oil and natural gas in the United States. Shares rose 0.8 percent to $95.17.

The Dow Jones industrial average rose just 0.77 point to 16,513.66, the S&P 500 gained 1.34 points, or 0.07 percent, to 1,882.48 and the Nasdaq Composite added 4.337 points, or 0.11 percent, to 4,128.235.

Pfizer Inc also lost ground as the biggest U.S. drugmaker reported revenues well below analysts' expectations. Shares fell 2.5 percent to $29.99.

Target Corp shares fell 3 percent to $60.16 after news that Chief Executive and Chairman Gregg Steinhafel will leave the company in the wake of a data breach late last year that hurt profits, shook customer confidence in the No. 3 U.S. retailer and prompted congressional hearings.

German aircraft seating maker Recaro said it was studying the possibility of buying assets from B/E Aerospace after the U.S. company announced a surprise review. B/E Aerospace shares jumped 11 percent to $98.84. (Editing by Bernadette Baum)

Source:

www.reuters.com

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Federal Reserve cuts monthly bond purchases and sounds upbeat

WASHINGTON — The Federal Reserve struck an encouraging note Wednesday: It will further cut its bond purchases because the U.S. job market needs less help. And the Fed said the economy had strengthened after it all but stalled during a harsh winter.

The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy "for a considerable time" after its bond purchases end, probably late this year. But it again offered no specific timetable for any rate increase. Most economists expect no rate increase before mid-2015 at the earliest.

Investors liked what they heard. Stocks rose after the Fed issued its statement, and the Dow Jones industrial average closed up 45 points to a record 16,580.

The Fed's guidance on short-term rates conforms to goals that Chair Janet Yellen noted in a speech this month. She said the Fed's rate policies must be flexible enough to meet unexpected economic challenges.

The Fed's description of an economy rebounding from the winter freeze was the only meaningful change it made from the statement it issued in March, after the first meeting that Yellen led after taking over in February.

Wednesday's statement also repeated the theme the Fed sounded in March that even after the job market strengthens and it starts raising rates, it probably will keep rates unusually low to support a still-subpar economy.

Source:

www.denverpost.com

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Do Recent Losses Signal End of the Bull Market?

The Dow Jones Industrial Average finally notched a new intraday high last week, but by Friday's close the air had seeped out of the party balloons and the entire market reversed course to the downside.

While the Dow and Standard & Poor's 500 have yet to break major supports, trendlines or moving averages, the writing is on the wall. It seems to be just a matter of time.

It is tempting to say that the Nasdaq suddenly fell apart and that dragged the rest of the market lower. The Nasdaq, however, peaked March 6 and has been in a down trend for more than a month already. Some of its highest flyers, such as Amazon.com (ticker: AMZN), which peaked in January, are already down more than 20%. That's a bear market in the textbook.

As for the S&P 500, last week saw a move above the top of a six-week trading range (see Chart 1). Bulls rejoiced, as it seemed that the index was finally back in gear and ready for further gains.

Chart 1

STANDARD & POOR'S 500

But there was something fishy about the breakout. For starters, the index ran from the bottom of the trading range to and through the top without pausing, and that is often a momentum-based overshoot of resistance. Meaningful breakouts usually are a bit more explosive – a sudden burst from a period of calm.

Pundits touted the presumed breakout, but other indexes – the Dow, the Russell 2000, the Nasdaq and the broad-based Value Line and Wilshire 5000 indexes – failed to confirm the move. Technical analysts call that "non-confirmation" and it told us that the soldiers did not follow the generals. Armies cannot win wars without soldiers.

Friday, the market's initial reaction to a modest but positive employment report was to the upside. Before lunch, however, stocks turned lower, led by Internet, social media and biotech names. These former momentum leaders were already in retreat when Friday's decline confirmed short-term down trends all around.

Technical analysts point out that Friday's initial rally and close below the previous day's low left a bearish "outside-day" on the charts. Its significance is a sudden and dramatic change from bullishness to bearishness, and if there is downside follow-through it can also signal a top. That follow through seems to have begun Monday.

But there is more to the sell-off. Failed upside breakouts through trading range, as seen in the S&P 500, often become bearish signals by themselves. At a minimum, they suggest a move to the bottom of the previous pattern. If that fails to support, the market then it will have even more trouble ahead.

As mentioned, the Dow Industrials reached a new high last week (see Chart 2). That prompted followers of Dow Theory, the century old method of chart analysis that in part watches the Industrials and Transports together, to rejoice. In simple terms, new highs on both indexes create a buy signal.

Chart 2

DOW JONES INDUSTRIAL AVERAGE

The Transports were already at new highs, so the Industrials breakout was supposed to be bullish. The problem was that the Industrials never closed at a new high. The anticipation, if not euphoria, surrounding the signal suggested excessive optimism, even if that was not reflected in traditional sentiment indicators such as the CBOE volatility Index (VIX).

That leaves the Dow with a failure at resistance and that leans bearish. If the index falls below last month's low of 16,047, then the bearish signal would be confirmed.

Finally, the Nasdaq is in the worst shape of the three major indexes and is the only one below its 50-day average (see Chart 3).

Chart 3

NASDAQ

The critical event was the drop below the trendline drawn from the June of last year. That low point was a key inflection for the market as it ended a one-month slide that had created a rather fearful atmosphere. The sudden upside reversal left an important anchor point on the charts that technical analysts have used ever since.

When a key trendline breaks we have to take notice. The Nasdaq is now broken and favorite momentum stocks are toast.

The Dow and S&P 500 are damaged but not yet officially broken. Therefore, there is still hope for the bulls. But backstage I can hear the fat lady warming up.

Getting Technical Mailbag:Send your questions on technical analysis to us atonline.editors@barrons.com. We'll cover as many as we can, but please remember that we cannot give investment advice.

Michael Kahn, a longtime columnist for Barrons.com, comments on technical analysis at www.twitter.com/mnkahn. A former Chief Technical Analyst for BridgeNews and former director for the Market Technicians Association, Kahn has written three books about technical analysis.

Comments? E-mail us at online.editors@barrons.com

Source:

www.macworld.com

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Markets Update : Substantial Rise In US Stock Market, Closes Near Record

Stocks pushed higher in late trading Wednesday, with the S&P 500 on track for another record close. The S&P 500 index added five points, or 0.3%, to 1891, with eight of 10 sectors higher. On Tuesday, the S&P 500 rallied 0.7% to close at a record high of 1885.52, the seventh record so far this year. The Dow Jones Industrial Average advanced 33 points, or 0.2% to 16567, less than 0.1% shy of its Dec. 31 record high of 16576.66. The Dow rose 75 points, or 0.5%, on Tuesday to close at the highest level of 2014.

75 points gain in Dow Jones

Nasdaq Composite Index Rises 0.1%

The Nasdaq Composite Index edged up four points, or 0.1%, to 4272. Stocks rose on the heels of a pair of economic reports that gave investors more reason for optimism about U.S. growth. On Wednesday morning, a report on the labor market was nearly in line with forecasts, and factory orders were stronger than expected. Recent data have helped boost investor confidence that a string of disappointing reports on the U.S. economy earlier this year were the result of an unusually icy winter, rather than an underlying slowdown.

But the S&P 500′s latest advance into record territory has been a grinding one. The index is up 2.2% so far this year, a marked slowdown from last year when the index notched a 10% rise in the first quarter alone, and tacked on an additional 20% over the rest of the year. In corporate news, Apple edged up 0.1% after The Wall Street Journal reported that the company was in talks to buy Japan’s Renesas SP Drivers, which makes power-saving smartphone chips, for as much as $1 billion.

S&P 500 index is up 2.2% so far this year

Goldman Sachs edged up 0.7% after The Wall Street Journal reported it is close to selling a trading business based on the floor of the New York Stock Exchange, formerly known as Spear, Leeds & Kellogg, to Dutch firm IMC Financial Markets. The companies are discussing a price of as much as $30 million, the report said, which is a fraction of the $6.5 billion Goldman paid for the business in 2000. MannKind rose 75% after a Food and Drug Administration committee recommended approval of the company’s inhaled therapy for diabetes.

Data and News Courtesy : Morrison Securities

Disclaimer: All data and information taken from the varied sources. Traders and investors are highly suggested, shared information not to considered/confused as any suggestion, option to use as absolute market trading. Data and information may vary from real time/actual data. In formation shared may change without any prior notice.

Source:

www.fxnewscall.com/

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