On Tuesday, stocks fell in a slow session of low-volume trading that was short of any solid events that would shake out either buyers or sellers.
The Dow Jones Industrial Average fell 0.1%, the S&P 500 fell 0.3%, as did the Nasdaq , and the Russell 2000 led the indices lower by posting a loss of 0.7%.
It appears that many investors are waiting for a decision by the Federal Reserve on a further hike in interest rates before making commitments. The central bank of the U.S. is expected to raise short-term borrowing rates at its next meeting on March 14-15. The Fed may be influenced by the Labor Department's release of the U.S employment figures for February, which will be announced on Friday.
Of the eleven sectors in the S&P 500, just one, Financials (up 0.5%), was a gainer. Telecommunications lost 0.8%, leading the list of ten losers.
At the end of the session, the Dow Jones Industrial Average fell 30 points to close at 20,925, the S&P 500 fell 7 to 2,368, the Nasdaq lost 15 points, closing at 5,834, and the Russell 2000 closed at 1,375 for a loss of 9 points. The NYSE's primary exchange traded 793 million shares with total volume of 3.5 billion shares. The Nasdaq crossed 1.8 billion shares. On the Big Board, decliners outpaced advancers by 2.3-to-1, and on the Nasdaq, decliners led by 1.9-to-1. Blocks on the NYSE fell to 6,298 from 6,335 on Monday.
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Note the very high volume of selling at the bottom of a classic bear market reversal, immediately followed by several weeks of even higher volume of buyers as institutions grabbed bargains. Now note the declining volume line as the market makes new highs but with fewer buyers. Institutional buyers are not as active at 25X trailing 12-months earnings as they were at about 10X at the bottom (my approximate guess).
Conclusion: The bull is getting older but is still strong since his food is earnings instead of lower interest rates. Yes, the Fed is raising rates, but even if it raised three times this year, available interest income is still at an historically low range. In other words where are investors to go? The balance of total returns, in my opinion, still favors equities, and Stovall's target of 2,460 on the S&P 500, though subject to more volatility, is still a viable target. Just strap on your seat belt since the last 10% of a bull market tends to be a wild ride.
Today's Trading Landscape
To see a list of the companies reporting earnings today, click here .
For a list of this week's economic reports due out, click here .
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