Stocks Still Can’t Break Out

Despite some peaks and valleys, stocks are almost exactly in the spot where
they closed two days ago, as few assets outside of gold and silver have been
able to show a sustainable move higher. On Thursday, the Dow Jones Industrial
Average rose 14 points to 12,285, the Nasdaq fell 1 points to 2760 and the S&P
500 hung flat at 1315. The latest market session was the reverse of Wednesdays
high-open-fade-to-the-close, as stocks in the U.S. began lower in the wake of
flat trading in Japan and a European selloff, only to churn higher to a flat
finish. Oil pushed itself back above $108 a barrel, and has now traded above
$105 for about three weeks. Gold and silver also pushed higher in response to a
weaker dollar and the strength in crude prices. Shares of mining and pipeline
companies were among the top outperformers. As is the way, airline stocks were
hit hard by the move higher in oil, and the downtrend in the sector going back
to November is very much intact. Delta Air Lines (NYSE: DAL ) fell 2.7%, while
U.S. Airways (NYSE: LLC ) dropped 2.4%. Even more broadly bearish was the
downturn in financial stocks on Thursday. The SPDR Financial Select Sector
(NYSE: XLF ) exchange-traded fund fell 0.8%. JPMorgan Chase (NYSE: JPM ) dropped
for a third straight session and by 2.8% on Thursday as concerns about the
companys traditional banking business amid a sluggish housing recovery seem to
have some stamina. The XLF is now down 3.3% since April 6, and has
underperformed the S&P 500s loss in the past 5 days by about 1.5 percentage
points. Which is the outlier? The bullish view is that stocks are looking as if
theyre putting in a floor after a weeklong selloff, and that oil prices as long
as they dont move significantly higher suggest confidence in global demand not
dropping off a cliff. On the other hand, bank stocks are definitely showing a
reluctance that housing and consumer-related worries are behind us. On the third
hand, did you catch Googles (NASDAQ: GOOG ) earnings after the closing bell? The
search giants stock slipped 4.5% in after-hours trading Thursday after the
company missed (!) Wall Streets earnings estimates despite revenue that beat
expectations by jumping 29.1% from a year ago. As alluded to in this space
Wednesday, not too many earnings underperformances especially by darlings in
the tech sector are baked into the expectations of stock market optimists. From
where Fridays market is now likely to open, a third straight flat finish might
be a heroic showing.