May 13th 2014 – Dow Halts 5-Day Winning Run

Market View:

Big retailers report tomorrow which will influence the market up or down.  However, we are in uncharted territory with the Dow and S&P and therefore it is difficult to predict were to expect it to go next.

I still think that, considering the Russell 2000 small cap index is now down 9% from it’s recent high, it will help drive the overall market higher as the tech stocks and the bio techs as well as the small caps re-bound, but it could be a bumpy ride.  Now that the market has eased off for 2 days after its Monday rally, we may see some strength return tomorrow.

Market News:

U.S. stocks declined on Wednesday, pausing after its advance into new highs, waiting for evidence that the economy has bounced back from a weather-plagued first quarter.

As the Dow and the S&P 500 on Wednesday came off record highs, the 10-year Treasury yield broke below a key support, viewed by some as signaling an economic slowdown and a reason to sell riskier assets.

The 10-year Treasury yield, used in figuring mortgage rates and other consumer loans, fell 7 basis points to 2.544 percent. It earlier hit a low of 2.5258, its lowest since Oct. 31.

Thursday’s economic releases include data on industrial production, as well as regional gauges of business activity from the New York and Philadelphia Feds.

Ahead of the open, the government reported wholesale prices increased the most in more than a year in April, with producer prices up 0.6 percent in April, versus a 0.2 percent estimate.

The PPI report is the first of two this week that traders are watching for signs of inflation, with the Consumer Price Index slated for release on Thursday.

Applications for mortgages edged a bit higher last week, as rates fell to their lowest level since November, the Mortgage Bankers Association reported.

Investors also tracked events in Ukraine, where seven government soldiers were killed by pro-Russian rebels in an ambush in an eastern region on Tuesday.

Thursday

Earnings: Wal-Mart, Nordstrom, JC Penney, Kohl’s, Vivendi, CA,Applied Materials, Flowers Foods, Advance Auto Parts

8:30 a.m.: Weekly jobless claims

8:30 a.m.: CPI

8:30 a.m.: Empire State survey

9:00 a.m.: TIC data

9:14 a.m.: Industrial production

10:00 a.m.: Philadelphia Fed survey

10:00 a.m.: NAHB survey

6:10 p.m.: Fed Chair Janet Yellen at US Chamber of Commerce on small business

News Sources:  CNBC and CNN Money