Concerns over a fuel gauge forced NASA to delay the launch of space shuttle Discovery. In similar fashion, the
index remained unable to get off the launch pad Wednesday, remaining stuck just under a key resistance level.
Crude oil's fall of 61 cents to $60.01 a barrel didn't inspire the major averages, and other potential catalysts also failed to deliver much upside for stocks. As
reported earlier, a narrower trade deficit in May and reduced budget deficit projections helped fuel the dollar, but bonds dipped, and equity players weren't inspired either.
The next chance for the S&P 500 might come from the tech sector -- the leader of the broad market in recent months -- as both
Advanced Micro Devices
released better-than-expected earnings after the close. (Shares of both firms were up 2% in recent after-hours trading.)
After treading water for most of Wednesday's trading session, the
Dow Jones Industrial Average
finished up 43.50 points, or 0.41%, at 10,557.39. The
rose 0.96 points, or 0.04%, to 2144.11.
Traders were mostly eyeing the S&P 500, which finished up 1.08 points, or 0.1%, at 1223.29, a level just shy of 1225, a four-year high first set in early March and briefly breached on Tuesday.
Just as NASA failed to provide another fixed date for the launch of Discovery, the market wonders what could trigger the push above 1225. This could lead the way to a breakout, with the index freed from that resistance level. The tech-heavy Nasdaq, for instance, has gained more than 40 points, or 2%, since breaching the key 2100 level last week.
According to Marc Pado, market strategist at Cantor Fitzgerald, the S&P's 1225 resistance level is not really "technical overhead" resistance, which involves "a lot of volume and a lot of time spent" below a particular level. "This is more of a benchmark, a four-year high, which involves psychological resistance," he says. "Once it's been breached, there's much less resistance involved."
A lot of traders tend to place short-selling orders slightly above the resistance level. But if the buying momentum persists, all these traders are forced to cover their positions and the upside gains are multiplied.
Still, the market needs fuel to provide that original push. "What we've seen is very constructive action taking place here. There's some consolidation, which seems pretty reasonable with crude near $61. And now it's like traders are saying 'show us something, show us the catalyst'" for more gains, Pado says.
Such a move would fit in the rebound momentum seen in the wake of the London bombings last week. The S&P 500 has gained 2.4%, the Dow is up 2.8% and the Nasdaq Composite is higher by 3.6%.
Barring Apple and AMD's blowout numbers, Pado's candidates for catalysts include Thursday's release of the June consumer price index and retail sales data. "If we get low inflation and strong sales, that may very well be enough to push" the S&P 500 above 1225, Pado says. If not, June producer prices or
earnings on Friday could do the trick.
Tame inflation numbers are already expected by the market, however. Wall Street expects the CPI to swing to a 0.1% rise from a 0.1% drop in May. The gain in the core CPI, which excludes food and energy, is expected to rise to 0.2% from 0.1%.
Similarly, economists expect a 0.2% increase in June producer prices after a drop of 0.6% in May. The core PPI is seen rising 0.2%, up from 0.1% the prior month.
As for retail sales, the market expects an increase of 0.9% in June vs. a drop of 0.5% the prior month.
These numbers may help to push the stock market higher. But fundamentally, the bond market is pricing in a less happy conclusion: While there's little evidence of inflation, the Fed is going to continue raising interest rates past previous market expectations.
Following a weaker-than-expected five-year note auction, the benchmark 10-year Treasury bond fell another 4/32 in price Wednesday while its yield rose to 4.16%.
Winners and Losers
Among stocks on the move,
was the Dow's best gainer, up almost 2% after Sanford Bernstein upgraded the company to outperform from market perform. In other brokerage action,
( SYMY) rose 2.8% after a Merrill Lynch upgrade while
( IFLO) shed 27.5% following a downgrade by First Albany.
Among companies reporting preopen Wednesday,
second-quarter earnings rose about 38% from a year ago, beating the analyst consensus by a penny. But the drug maker's stock fell 4.1% after the company forecast third-quarter earnings below Wall Street's expectations.
( HDI) second-quarter earnings slid 4% from a year ago but beat estimates by a nickel. The company also raised guidance for the year and its shares rose 1.4%.
, the largest U.S. hospital chain, fell 8.8% after warning second-quarter results will be shy of expectations. Similarly,
tumbled 48% after the company warned that third-quarter results would fall well short of expectations, cut its 2005 outlook and announced the resignation of its chief executive.
soared 48% after the company announced a deal with
to install its fluorescent lighting system into some of the retail giant's stores.
To view Aaron Task's video take on today's market, click here
In keeping with TSC's editorial policy, Godt doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He appreciates your feedback;
to send him an email.