Stocks trying to push higher after a touch of weakness
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The stock market is trying to right itself this morning after Monday’s selloff.
Share prices bobbed between negative and positive territory after the release of favorable housing data but a disappointing consumer-confidence report.
That follows its decline on Monday when the market did something that it has done only rarely in the powerful rally of the past six months – it forfeited an early gain and closed lower, with the Dow falling 104 points.
Foreign markets sagged overnight, falling 1.9% in Hong Kong and 1.5% in Japan. Through Monday, the Dow had fallen four of the past five days.
As of 7:30 a.m. PDT this morning, the Dow Jones industrial average was up about 35 points, or 0.4%, to 9,902.57. The Standard & Poor’s 500 was up 0.2%, but the Nasdaq composite was off 0.3%.
Given the powerful advance over the past six months, market watchers are looking for any sign that the rally is losing steam.
Better-than-expected earnings have driven prices higher recently and it’s not surprising that stocks would back off after surging in September and October, which are the weakest months historically. But investors are worried that high share-price valuations and the economic fallout of continuing job losses will take a tool eventually.
Some worry that the market is weakening below the surface. For example, the percentage of stocks hitting new 10-day lows is on the rise, according to New York research firm Concept Capital.
“Our short-term momentum indicators all reversed direction in the past week, highlighting the internal weakness of the market,” Concept Capital said in a note to clients Monday.
-- Walter Hamilton