The S&P blasted off to new multi-year highs Tuesday, triggering the head and shoulders pattern that was formed by last week's earnings-inspired bounce. The advance-decline line today showed wide breadth to today's breakout, a healthy sign for the bull market. Markets will likely be quiet in the morning tomorrow as investors wait for the FOMC rate decision at 12:30pm ET, which will be followed by the more detailed press conference at 2:15pm.
Amazon.com, Inc. (AMZN
) fell far short of EPS expectations, reporting 44 cents per share vs. consensus estimates at 61 cents. However, net sales increased 38 percent to $9.86 million vs. expectations of $9.52 million. Shares initially traded down sharply (~6%) as traders saw the big earnings miss, but it appears spending on cloud computing projects accounted for the EPS anomaly.
Momentum stocks did not lead the charge today, with some actually pulling off hard following recent strength. The Chinese Internet stocks were weak with Sohu.com, Inc. (SOHU
) and SINA Corporation (SINA
) shedding 3.0% and 2.8% respectively. We have seen the iShares Dow Jones Select Dividend ETF (DVY) outperform the market since mid-February, a sign investors are looking to take some risk off and move into slower moving, more value-oriented stocks.*DISCLOSURE:
Scott Redler is long SPY, OIH, GIGM, LVS, GLD, POT, JDSU, AAPL, WFC, F, JPM, CRM, CSCO, CIEN, MGM. Short SLV.
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