NEW YORK (TheStreet) -- Indices fluctuated in a directionless day of trade for much of the afternoon. Investors may be excused for thinking there's little more than a sideways shuffle happening in markets.
But key drivers are machinating beneath the surface: a rolling correction in tech stocks, poor performance in financials and cynicism around small caps.
It was a better showing from techs stocks that lifted sentiment on Monday -- think Netflix (NFLX), Google (GOOG) and Facebook (FB) -- together with small caps, pulling markets higher in afternoon trade after a sluggish start.
The rally in Treasuries may also be starving off a stock correction -- fueled by expectations of European stimulus, worries around Russia and a supply shortage of U.S. bonds. Palisade Capital's Dan Veru reckons the action in Treasuries is more about these factors than concern around the domestic economy. But plenty of pundits sit in the latter camp, holding their breath for a recovery in second quarter GDP; no question that Q1 was a shocker.Veru also sees the 8% fall in the Russell 2000 since March as a decent entry point for that index, noting a general split between the S&P and small stocks. Probably true in the long run, if you're bullish on the U.S. economy. A cool reception to the AT&T (T) and DirecTV (DTV) merger dampened the mood in early trade, while talks between AstraZeneca (AZN) and Pfizer (PFE) broke down. But in the absence of big economic data or mega earnings misses, investors were happy to push stocks higher -- albeit, not by too much.
5 Blue Chips Own Up to Climate Change Risk
4 Huge Stocks on Traders' Radars How the NFL Could Kill DIRECTV-AT&T Merger
-- By Jane Searle in New York Follow @itsjanesearle
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV