I think after yesterdays impressive recovery it was inevitable that a shallow pullback was necessary and today that is exactly what we received. The market after all must go down in order to wave back up. However, I believe that the market is setting up for a Friday rip higher tomorrow. I said earlier in the week that it was very likely that a new all time high will come in the S&P. All attempts at selling have been bought, and despite the ongoing noise of Greece, the IMF and the ECB, I believe that tomorrow is when we will see a move higher again. Frankly it is about time the market decided to go in one direction or another for a few days in a row. Perhaps that time is now as the path of least resistance is up…
U.S. stocks traded mostly lower on Thursday as a lack of resolution on Greece debt talks and declining transports weighed on investor sentiment.
The Dow transports resumed their decline, falling more than 1 percent. U.S. stocks have alternated between losses and gains in the last three trading days.
Christine Lagare, the head of the IMF, told a German newspaper that a Greek exit from the euro zone was possible but that this would probably not herald the end of the euro currency.
On Wednesday, both U.S. and European equities rallied after Greece said it had stated crafting a “staff level agreement” with its international bailout supervisors.
However, European officials rebuked the claims on Thursday, saying there was some way to go before any agreement could be drawn up and that they were surprised by the upbeat sentiment from Greece.
The Greek government’s spokesman still said a deal should be reached by Sunday, Reuters reported.
Earlier, investors remained cautious following China stocks plunging 6.5 percent on Thursday, with traders citing the tightening of marginal lending rules as an explanation. Despite the selloff, the Shanghai Composite is still up more than 40 percent year-to-date.
Meanwhile, U.S. officials were at the Group of Seven (G-7) meeting of finance ministers and central bank chiefs in Dresden, Germany, on Thursday, which will continue until Friday. Greece is on the agenda, as well as reviving global growth.
Weekly initial jobless claims came in at 282,000, up slightly from last week’s 274,000 read.
Pending home sales rose 3.4 percent in April, their highest in 9 years.
On Friday, there will be the second estimate of first-quarter economic growth.
San Francisco Fed President John Williams said in Singapore on Thursday he expects the U.S. economy to grow about 2 percent and unemployment to drift below 5 percent this year, Reuters reported. Williams cautioned that more economic data needs to be collected before a decision on interest rates is made.
8:30 a.m.: Real GDP Q1 (second)
9:45 a.m.: Chicago PMI
10 a.m.: Consumer sentiment