WALL STREET : DJIA Takes Back 12,500 on Low-Volume Victory

The Dow Snap 3 Straight Losing Sessions
After three straight losing days for the Dow, the major market indexes seemed bound and determined to regain some ground today. A surprisingly upbeat earnings forecast from Dell (DELL) helped fuel the bulls, as did some merger-and-acquisition news from Allstate (ALL) -- even as the latest quarterly reports from retail mainstays Target (TGT) and Staples (SPLS) fell flat. Traders also shrugged off signs of discord at the Fed, with members of the rate-setting Federal Open Market Committee (FOMC) at odds over how and when to withdraw liquidity from the financial system. "A few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps toward less-accommodative policy sooner than currently anticipated," according to the minutes from the FOMC's late-April meeting. Despite this lingering economic uncertainty, the day was ultimately a low-volume victory for the bulls.


The Dow Jones Industrial Average (DJIA – 12,560.18) found an intraday roadblock in the form of the 12,570 level, but still managed a solid gain of 80.6 points, or 0.7%. All but seven of the Dow's 30 components closed higher. Caterpillar (CAT) paced the 23 advancing blue chips with a 3.1% rise, while Hewlett-Packard (HPQ) swallowed the steepest loss of 1.1%, pressured by a fresh round of post-earnings downgrades and price-target cuts. Thanks to today's jump, the Dow reclaimed its foothold above the 12,500 level, and has now whittled its weekly deficit to just 0.3%.

The S&P 500 Index (SPX – 1,340.68) fared similarly well, adding 11.7 points, or 0.9%. In fact, the SPX eked out a daily close above its 10-day moving average for the first time since May 10, and is now up 0.2% for the week. Finally, the Nasdaq Composite (COMP – 2,815.00) bounced back above the 2,800 region, ending the day up 31.8 points, or 1.1%. However, the COMP is still down 0.5% from last Friday's close.

Crude Regains Foothold Above $100 per barrel

Crude futures reclaimed a foothold in triple-digit territory today, as a surprise drop in domestic inventories sparked some buying interest for the beaten-down commodity. U.S. crude stockpiles declined by 15,000 barrels last week, according to the Energy Information Administration (EIA), while gasoline supplies rose by a smaller-than-forecast 119,000 barrels. This news of dwindling petroleum inventories, taken in context with the commodity's recent pullback, set the stage for bargain-hunters to make their move. Crude oil for June delivery finished with a gain of $3.19, or 3.3%, at $100.10 per barrel.

HAPPY TRADING