This is quite a broad rally, with the S&P 500 closing higher for it’s 4th day in a row. But will it last? I think we may see a breather tomorrow, profit taking of some sort is bound to come in.
However, the trend is up, therefore any selling may not last.
Stocks finished broadly higher today, with the S&P 500 setting a new record, as investors cheered a batch of better-than-expected economic reports and merger activity.
On the economic front, durable goods unexpectedly rose 0.8 percent in April, according to the Commerce Department, exceeding expectation for a loss of 0.7 percent.
Adding to positive news, S&P/Case-Shiller’s composite index of 20 metropolitan areas rose 0.9 percent in March, edging past expectations for a gain of 0.7 percent.
Meanwhile, consumer confidence hit 83 in May, in line with expectations.
Gold prices slipped 2 percent to a 3-1/2 month low, extending losses after strong data lifted optimism about the economy. Gold miners including Barrick Gold, Newmont and Goldcorp were trading lower.
Adding to gains, European Central Bank chief Mario Draghi said Monday the bank must be “particularly watchful” for any negative price spiral in the euro zone. That added to suggestions from other ECB policymakers that the bank was ready to cut rates next week to counter low inflation and weak lending in the euro zone, keeping asset purchases as an option. European shares rallied.
European markets had an eventful session Monday – with some key markets up by over 1%. They were still positive Tuesday, but less enthusiastic.
Investors brushed off European Union election results that showed far-right and far-left parties had gained additional traction. A majority of voters still supported traditional parties in the European Parliament.
Investors were also pleased that Ukrainian elections were completed without too many complications.
European markets have also been boosted by dovish hints emerging from the European Central Bank, which may be poised to inject new stimulus measures when it meets next month.
Asian markets were mixed Tuesday. The Nikkei closed higher, but many other indexes were down.
WEDNESDAY: Mortgage applications, 5-yr note auction; Earnings from Michael Kors, Toll Brothers
News Sources: CNBC and CNN Money