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The market closed the first session of the new week mixed. The Dow, up more than 150 points in early trading, finished the day up by 0.3% while the Nasdaq gave up 0.5% following more than 3% gain in the previous week. It is a very light week in terms of economic news. The Leading Indicators came at 0.1% vs. unchanged expected and marked the second consecutive month of growth. Based on current available data in May, we may see another positive reading. On the negative side, crude oil reversed early loss and closed at another record high. Interestingly, the Dow Transportation Average also hit a new historical high today
Basic materials and technologies saw some profit taking today while energies continued to hit new highs. Although some market sources cited comments from SanDisk CEO as the trigger for afternoon’s selloff, we should note that both basic materials and technologies have enjoyed a great run since March and a pullback or consolidation is actually healthy going forward. In addition, right before the selloff, all three major indices were above their 200-day moving average and the VIX was at a 10-month low, which showed wide-spread complacency among buyers. The CRB Commodity Index ended the session modestly lower. The US dollar was mixed against major currencies while treasuries erased early losses following afternoon’s selloff in equities.
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