A Melt Up From The Day's Lows

After spending most of the day in negative territory, an early afternoon move off lows and a final hour squeeze higher allowed the major indices to finish well off their morning lows. Although volume was mixed (it was light on the Nasdaq, but only slightly lower than what we saw last Thursday on the NYSE) my suspicion that performance anxiety would help continue to keep a bid under this market was certainly in play today. Indeed, the final hour performance again underlines the notion that big money players are looking for ways to put capital to work, and aren’t afraid to chase when prices are moving rapidly higher – even if some last minute selling prevented the indices from finishing the day at highs.

We’ll see how it goes. Much of the action is going to be dictated by earnings news in the coming days and weeks, and that means we need to be patient and wait to see how the action plays out as we hunt for more opportunities.

More detail - Thanks to leadership from financial stocks, the stock market reversed an early 1.3% decline to finish with a modest gain. Weakness was widespread and trading was listless in the early going. Financial stocks had been among the session's worst performing sectors in the first few minutes of action, falling as much as 2.7% as traders took profits following the strong gains that financials registered late last week. However, buyers provided support by buying the dip in financials, as has been the case in recent weeks... Goldman Sachs provided a strong, positive influence to the financial sector. Goldman announced that it raised $5.5 billion in capital to fund another private equity operation, and while the company previously stated it does not intend to raise any more capital through share offerings, it reneged by announcing after the closing bell a $5 billion public offering of common equity. Goldman used the announcement as an opportunity to report its quarterly results, which were scheduled to be announced Tuesday morning. Goldman posted earnings of $3.39 per share, which is far better than the $1.60 per share that was widely expected. Goldman also trimmed its quarterly dividend to $0.35 per share from almost $0.47 per share... Financials were able to close with a 4.8% gain, a bit shy of their session high, and are now down 11.0% year-to-date. That means financials are no longer the worst performing sector this year... Industrials have replaced financials as the year's worst performing sector. Industrials are down 12.9% this year, but they logged a 0.4% gain this session. General Electric was the primary leader among industrial stocks... Health care stocks traded with gains for virtually the entire session, but they weren't really a source of leadership for the broader market. Health care gained 0.3% amid support from Express Scripts and WellPoint. The companies have signed a definitive agreement in which Express Scripts will acquire WellPoint's NetRx subsidiaries for $4.675 billion... Health care stocks will likely remain in focus tomorrow as Dow component Johnson & Johnson reports quarterly results tomorrow morning... The energy sector lagged the broader market for the entire session, and closed 1.3% lower. Energy stocks were hampered by news that Chevron expects sequential earnings to be down sharply, partly due to lower oil prices... Crude oil contracts fell under a stiff bout of selling pressure. Contract prices closed 4.2% lower at $50.05 per barrel after the IEA cut its 2009 global oil demand forecast by 1 million barrels per day... Participants will have plenty to assess tomorrow. In addition to several widely watched earnings announcements the March Producer Price Index, March Advance Retail Sales data, and February Business Inventories are all due tomorrow morning.