Market Shakes Off Bad News; Lower Open

For the second day in a row, buyers stepped up to plate following a gap lower at the open. This morning’s trigger was news that regulators have said that preliminary results from their bank stress tests show that both BAC and C may need additional capital. Still, while we were able to recover quickly early in the morning, the troops weren’t ever able to get things moving to the upside.

A brief surge to the best levels of the session during the contra-hour gave market players a chance to hit the exits as another bout of wacky action in the final hour pushed us right back towards the unchanged mark. Still, despite the fact that the broader market remains range-bound, there’s plenty of speculative action under the surface. Not only are traders busy chasing names that have already seen strong runs even higher, but they are rooting around, trying to see if they can get other stocks that have yet to break out of their bases.

So, there are plenty of opportunities out there for some short-term trading. I'm still not in a spot where I can put significant amounts of capital to work, but it sure beats the constant negativity we had to deal with earlier this year.

Going into more detail, stocks log minor losses, but finish well off of the session lows:

Bank stocks led losses in the early going and into the close, but in between stocks were able to trade with modest gains amid signs of improved consumer confidence and strength in Dow component IBM... Financial stocks were down as much as 2.6% in the first few minutes of trading as investors grew worried about bank capital levels. According to a report from The Wall Street Journal, Bank of America and Citigroup may need to raise billions to satisfy the government's bank stress tests. Citigroup simply responded by stating that its regulatory capital base is strong and it continues working to improve tangible common ratios, according to Reuters... JPMorgan Chase bucked the negative trend among major banks to lead financials into positive ground, but the advance proved unsustainable as sellers redoubled their efforts against financials and handed the sector a 1.8% loss for the session, worse than any other sector... Though the financial sector's late downturn resulted in a loss for the broader market, stocks were able to trade with modest gains for much of the session. The gains came after the Conference Board reported its Consumer Confidence Index for April improved to 39.2 from 26.9. The reading was expected to come in at 29.7... Meanwhile, IBM provided additional support to the broader market by increasing its quarterly cash dividend by $0.05 to $0.55 per share and authorized $3 billion in funds for stock repurchases. Despite IBM's announcement, tech stocks finished the session with a 0.6% loss... Telecom stocks actually logged the best performance of the session by advancing 1.2%. Verizon showed leadership amid reports that the company is pursuing partnerships that will help develop advanced generation mobile phones... Biotech stocks and managed health care stocks provided support to the health care sector after Hospira and Coventry Health each reported better-than-expected earnings for the latest quarter. Pharmaceuticals stocks garnered little support even though Pfizer and Bristol-Myers Squibb both posted solid quarterly earnings results....