Stocks Bear Up to Terror

The stock market held up well in the face of a foiled terror plot Thursday as investors' attention was briefly torn away from the waning economy. But looking beyond the headlines, analysts and technicians are debating whether the bull market that began in 2003 is finally over.

U.K. authorities reported Thursday morning that terrorists planned to board commercial jets scheduled for trans-Atlantic flights, and explode the planes in midair. Crude prices traded lower on the expectation of weaker demand for jet fuel, with oil dropping $2.35 to close at $74 a barrel.

The plotters reportedly targeted planes of American Airlines(AMR Quote - Cramer on AMR - Stock Picks), Continental Airlines(CAL Quote - Cramer on CAL - Stock Picks), and United Airlines(UAUA Quote - Cramer on UAUA - Stock Picks). Shares of those airlines fell 0.2%, 1.53% and 1.38%, respectively. British Airways(BAB Quote - Cramer on BAB - Stock Picks) shares fell 4%.

After some early weakness, major averages ended the day on a positive note, however. The Dow Jones Industrial Average gained 0.4% to end at 11,124.37, while the S&P 500 added 0.5% to close at 1271.81, and the Nasdaq Composite gained 0.6% to 2071.74.

Major averages were boosted by financials such as American International Group (AIG Quote - Cramer on AIG - Stock Picks), retailers such as Urban Outfitters (URBN Quote - Cramer on URBN - Stock Picks) and Target (TGT Quote - Cramer on TGT - Stock Picks), and chip stocks such as Micron Technology (MU Quote - Cramer on MU - Stock Picks).

The dollar rose against the yen and euro, while gold futures fell $16 to close at $646 an ounce.

Black Hole Sun

Thursday's resilience notwithstanding, the prior cyclical leadership continues to fade, and defensive sectors are taking up the slack. Some say the shift in leadership is a sign of the bear, and that the major averages likely made their highs for the cycle in May.

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