S&P 500 Index - New All-time Record Intra-day High (Finally)

The S&P 500 Index finally advanced today above its record intra-day high of 1,576.10 as set in October 2007. Today’s gains in the U.S. stock market were convincing and across-the-board. The Dow Jones Industrial Average also posted a record high today, and the NASDAQ Composite Index posted its best closing level since November 2000. The Dow Jones Transportation Average and the Russell 2000 Index posted big gains today, but are both still slightly below their all-time highs as established in mid-March.

Here are today’s closing marks, with changes from Tuesday’s close:

                                                                                    Wednesday’s Closing Prices              

Dow Jones Industrial Average                        14,802.24        +128.78           +0.88%

S&P 500 Index                                                  1,587.73        +  19.12           +1.22%

NASDAQ Composite Index                               3,297.25        +  59.39           +1.83%

Russell 2000 Index                                               946.09        +  16.75           +1.80%

Dow Jones Transportation Average                  6,181.33        +108.47           +1.79%

From the minutes of the most recent Federal Open Market Committee Meeting, as released today, there was some discussion at the Fed about possibly scaling back the current $85 billion/month bond purchase program (aka QE3), but Fed Chairman Bernanke is clearly not onboard with this idea. In fact, as recently as Monday this week he said that economic conditions were far from where he would like them to be. The U.S. stock market is advancing on this monetary green light from Mr. Bernanke, dramatically easier monetary policy moves in Japan recently, friendly monetary rhetoric from Europe, and improving sentiment among investors regarding Q-1 U.S. corporate earnings reports expected immediately ahead.

Bottom Line: Today’s gains in the U.S. stock market were convincing and broadly based. The path of least resistance is clearly to the upside right now, and additional gains can be anticipated over the next two or three days. My target date for the next peak, as mentioned this past weekend, is still Monday, April 15^th. I don’t see any reason to step in front of this northbound train right now, but I also believe that the risk of a sudden downturn is too high to safely join in the rally.

U.S. Stock Market - Solid Bounce Today; New Record Highs Ahead

Solid across-the-board gains were posted in the U.S. stock market today as most investors shrugged off Friday’s surprisingly weak monthly employment report. Today’s rally came on the heels of a fairly dramatic upside reversal which began early Friday in the first hour of NYSE dealings after the employment-news-related gap-down opening. Earnings season is now officially underway, and it seems to me that analysts and corporations alike have both set expectations on the low side (which means actual results may surprise on the upside). There have been an unusually high number of negative warnings, with 107 negative revisions for companies in the S&P 500. Compared to positive revisions, this is the worst pace in 12 years. According to a survey by Bloomberg, analysts now project profits for S&P 500 companies actually fell 1.8 percent in the latest quarter, the first year-over-year drop since 2009. These same analysts had predicted a 1.2 percent increase when surveyed in January.

Here are today’s closing marks, with changes from Friday’s close:

                                                                                    Monday’s Closing Prices                   

Dow Jones Industrial Average                        14,613.48        +48.23             +0.33%

S&P 500 Index                                                  1,563.07        +  9.79             +0.63%

NASDAQ Composite Index                               3,222.25        +18.39             +0.57%

Russell 2000 Index                                               931.49        +  8.21             +0.89%

Dow Jones Transportation Average                  6,091.59        +54.23             +0.90%

Bottom Line: The bar has been set artificially low for upcoming corporate earnings reports, and “smart money” is already buying ahead of actual results, which may very well surprise on the upside. IRA retirement fund contributions ahead of the April 15th deadline may also provide a boost for U.S. stock prices this week. As mentioned over the weekend in this column,  it looks to me like the Dow Jones Industrial Average and the S&P 500 Index will both post new all-time record highs this week.