Tepper's Spark Ignites a Blaze, Sending the S&P Through 1650

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Tuesday was an unusual day for the market as a serious rally appeared to have ignited on bullish comments from a hedge fund manager, despite a lack of obvious market-moving news.

This morning on CNBC, investment magnate David Tepper of Appaloosa Management issued an extremely positive outlook on the stock market, going so far as to say, "For guys that are short, they better have themselves a shovel to get out of the grave."

The initial positive reaction in US stock futures seemed like a simple countermove in the face of negative expectations, as it had been rumoredon Monday that Tepper was set to come out as bearish.

However, momentum was ignited, and we saw a day that could most definitely be characterized as "risk-on," complete with the S&P 500 (INDEXSP:.INX) surging into the close to break the 1650 level for the first time in history.

Furthermore, the small-cap Russell 2000 Index (INDEXRUSSELL:RUT) , which outperformed the S&P, finished at 985, putting it within striking distance of the 1000 level. We also saw US Treasury yields rise and significant outperformance in financial stocks. Goldman Sachs ( GS ) was a notable outperformer in that group, surging over 3%.

However, the real standout mover of the day was Tesla Motors ( TSLA ). Following its recent dramatic earnings report and news-driven surge (due to the extremely positive reviews of its Model S car), the stock rose a whopping 11% to $97.12 within the first two minutes of the market open.

By the afternoon, the stock fell as low as $81.15 before bouncing up to finish at $83.34, showing the dangers (and opportunities) in trading high-octane momentum stocks -- especially when they have 40%+ short interest level.

Over in economics, the April Import Price Index fell 2.6%, which was slighter better than the expected -3.1% reading, while the Export Price Index was in-line with expectations at -0.5%.

In international news, ratings agency Fitch upgraded its rating on Greece to B- from CCC, which drove some optimism in Europe.

However, note that many investors are keying in on the action in Japanese bonds as well as the yen, both of which have fallen sharply in recent sessions.

Tomorrow's Financial Outlook

In economics, we'll see a host of data coming out, including the MBA Mortgage Index at7:00 a.m. EDT, the PPI at8:30 a.m. EDT, and the Empire Manufacturing Index at8:30 a.m. EDT. For a full economic calendar, please consult our Trading Radar .

We'll see a few major earnings reports outtomorrow , namely Deere ( DE ) and Macy's ( M ) in the morning, and Cisco Systems ( CSCO ) after the close.

Looking forward, we suspect tomorrow's economic data reports could set the tone for the next move in the market. Despite positive sentiment indicators, market participants continue to seem overly cautious . As we've seen many times this year, weakness in data doesn't necessarily equate to weakness in stocks, so resist the urge to make snap decisions.

Twitter: @Minyanville



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: CSCO , DE , GS , M , TSLA

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