STOCKS ARE HAVING A POSITIVE WEEK -- THE DOW IS TRYING TO CLOSE OVER 25K -- THE S&P 500 IS CHALLENGING ITS MARCH HIGH - UNITED TECHNOLOGIES, ROCKWELL COLLINS, AND BOEING LEAD A STRONG AEROSPACE GROUP HIGHER
S&P 500 IS CHALLENGING MARCH HIGH ... Stocks are ending the week on a positive note. The Nasdaq hit a new record high yesterday. Today's rally is being led by the Dow and S&P 500. Chart 1 shows the Dow Industrials trying to end above 25000 for the first time in a month. Wednesday's pullback bounced off support at its 50-day average (blue line). The S&P 500 is also having a strong chart day. Chart 2 shows the SPX challenging its March intra-day high at 2801. A close above that chart barrier would put the SPX at the highest level since early February. The SPX is being led higher today by energy, industrials, consumer staples, and healthcare. A weak bank group is keeping financials in the red for the day. Aerospace stocks are leading the industrial sector higher.
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Chart 1
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Chart 2
AEROSPACE STOCKS TURN UP ... The next three stocks are leading the aerospace group higher today. Chart 3 shows United Technologies (UTX) breaking out to the highest level in four months. Chart 4 shows Rockwell Collins (COL) jumping to the highest level in a month after decisively clearing its 50-day line. Chart 5 shows Boeing (BA) trading above its 50-day line.
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Chart 3
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Chart 4
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Chart 5
CYCLICALS AND HEALTHCARE LEAD MARKET HIGHER ... Chart 6 shows the Consumer Discretionary SPDR (XLY) testing its June high. A close above that previous peak would put the XLY at a new record. Chart 7 shows the Health Care Sector SPDR (XLV) trading at the highest level in nearly six months. That's a good sign for the market because those two sectors have a combined weight of 27% in the S&P 500. Healthcare is now the second biggest sector in the SPX (14%), while the XLY is fourth (12.9%). Their combined strength is helping to offset a weak financial sector, which has slipped into third place with an SPX weight of 13%. Banks stocks are having a disappointing chart day and are pulling the financial sector lower.
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Chart 6
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Chart 7
BANKS WEIGH ON FINANCIALS ... Some big bank earnings reported today failed to inspire confidence in that group. Chart 8 shows the S&P Bank SPDR (KBE) falling below its 200-day moving average today. Bank selling is helping make financials the day's weakest sector. Another drop in bond yields and a flatter yield curve may be weighing on banks and other financial stocks. Five sectors are in the black today, however, and are helping keep the week's rally going.
