Stock Surge Ends Up Sagging

If youre scoring this one at home, the ultimate slip in Mondays stock market
seems like a minor consolidation after stocks just spent nine days running up
more than 5% from a recent low. And while that may prove to be the case the
session certainly started with a lot more hope. The Dow Jones Industrial Average
slipped 23 points to close at 12,198, the Nasdaq fell 12 points to 2731 and the
S&P 500 dropped 4 points to 1310. Within the first hour of Mondays trade,
however, stocks had been intent on extending their move higher. The S&P 500 had
touched 1320 at one point, while the Dow was working on 50-point gain. And then
the fade set in. Lay it at the feet of tech stocks, which took more of a
breather on Monday following their outperformance during the markets push of the
past week and a half. As one leading example, eBay (NASDAQ: EBAY ) was off more
than 4% on heavy volume following news that it would buy GSI Commerce (NASDAQ:
GSIC ). Research In Motion (NASDAQ: RIMM ) was down another 1.6%, as the stock
continues to reel from a weak profit forecast delivered last Wednesay. But the
jig also was up at Yahoo (NASDAQ: YHOO ) which had enjoyed a rebound amid the
broader markets recent runup, but fell 2.2% on Monday. With one of the markets
main driving sectors of late collapsing into the red, it was difficult for the
broader market to do anything but join in even on a day that offered oil prices
falling below $104 a barrel and a modest move lower in bond prices, which kicked
the 10-year note yield back up to 3.45%. Transportation stocks, however, did
take advantage: with the Dow Jones Transportation Index closing 0.4% higher and
in a clear uptrend since the middle of March. FedEx (NYSE: FDX ) added 3% and
AMR Corp. (NYSE: AMR ), parent of American Airlines rose 2.5%. The issue for
bulls, of course, is whether the stumble into Mondays closing bell was a sign of
the markets inability to rally higher on Monday or for some term beyond that.
With a week expected to be light on significant corporate and economic data
until Fridays employment report, modest gains and/or losses may be a typical
result for the next few days.