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The market started the new week in a positive tone. All three major indices managed to fully recoup their losses from last Friday then added a few more points. The volume, however, is on the light side. There is little economic news scheduled to be released today although we have tons of economic news late this week. A pullback in the oil price seemed to be enough to offset negative earnings warning from FedEx and another gigantic loss from bond insurer MBIA.
All major sectors ended the day in green. Transportations and technologies were among noticeable winners. Financials, benefited from a positive earnings result from HSBC and comments from James Dimon that the financial crisis is three-quarters over, also fared pretty well. The CRB commodity index retreated a little following the record close in the previous week led by profit-taking in energies. It is worth noting that China’s import of crude oil dropped 4% from a year ago in April, the first such decline in 18 months. The US dollar was mixed against major currencies while treasuries lost ground. The VIX index, which is usually used as a fear indicator, closed below 18 for the first time this year, indicating less volatility in the month ahead. But if history is any guide, volatility often comes at a time that nobody expects. Hopefully things are different this time around.
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