May 5th 2014 – Relief as US Services Sector Overrides Global Worries

Market View:

What started ugly turned into a pretty good day and once again shows that the trend does seem to be up on a possible stronger US economy coming out of a long cold winter.

I think we will see an all-time high in the S&P this week.  But clearly market participants are nervous given the nature of the swings today.  Chinese PMUI was quickly countertrended by US data which was great to see.

Market News:

U.S. stocks advanced today, with the Dow industrials coming back from a triple-digit deficit, as an upbeat read of the U.S. services sector countered concern about conflict in Ukraine and growth in China.

Stocks trimmed their losses, with the Dow turning positive after erasing all of a triple-digit drop, as the Institute for Supply Management’s non-manufacturing index for March found the service sector growing at its fastest clip in eight months.

The session started with equities sharply lower amid geopolitical concerns and gloomy data from China.

Recent reports from Ukraine had a Ukrainian military helicopter shot down over a rebelled-held Eastern town, with the pilots surviving, according to a statement from the Defense Ministry.

European markets finished lower, as worries over growing tensions and lawlessness in Ukraine may be causing investors some unease. Germany, Russia’s biggest European trading partner, saw its Dax index regain some lost ground after falling 1% earlier in the day.

Asian markets ended the day with mixed results, as monthly manufacturing data from China showed contraction in the world’s second largest economy. Some international markets were closed Monday, including exchanges in London, Seoul and Tokyo.

Tuesday:

Earnings: Disney, Whole Foods, Electronic Arts, Henry Schein, Mosaic, Rowan Cos, FireEye, Potbelly, Groupon, Sunoco Logistics, American Financial Group, First Solar, Marathon Oil, Agrium, CBOE Holdings,UBS, DirecTV, Discovery Communications, Holly Frontier

8:30 a.m.: International trade

7:00 p.m.: Fed Gov. Jeremy Stein

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