May 19th 2014 – Internet stocks boost Nasdaq

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Market View:

No major economic news came out on Monday, however, news of mergers and acquisitions as well as a bounce in the oversold small cap sector boosted the market.  It remains to be seen if a new all tie high on the S&P 500 comes this week or if we are destined for a flat to possible down market for the summer.  A lower high in the coming days may signal a change in the intermediate up trend.  We shall see.

Market News:

Stocks eked out gains after hovering around the flatline for much of the session Monday, as investors remained cautious amid recent mixed economic reports. The Nasdaq rallied, thanks to a strong performance in Internet stocks.

Equities have come under selling pressure in recent days, with the S&P 500 logging its first back-to-back losing weeks since January. Small-cap stocks, often seen as the first beneficiary of growth, have tumbled with the Russell 2000 index briefly dipping into correction territory last week.

The small-cap Russell 2000 index led the rally. Internet companies such as Zillo, Pandora, Yelp, and LinkedIn were up more than 3 percent each.

Home Depot, TJX, Lowe’s, Target and Hewlett-Packard are among notable earnings slated to post results throughout the week.

Meanwhile, San Francisco Fed President John Williams said the central bank is moving toward normalizing U.S. monetary policy, and is on track to raise rates probably some time in the next year.

European markets finished mixed. Banking stocks, including Deutsche Bank (DB) and Barclays (BCS), slipped in Europe after Deutsche Bank announced it was raising roughly €8 billion ($11 billion) from investors, including Qatar, to meet regulatory requirements.

Asian markets mostly ended with losses. However, the Mumbai Sensex index continued to rise as investors cheered the election of a new leader, Narendra Modi

TUESDAY: Fed’s Plosser speaks, Fed’s Dudley speaks, Microsoft Surface event; Earnings from Home Depot, Dick’s Sporting Goods, Staples, TJX

News Sources:  CNBC and CNN Money

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