Option Investor
Market Updates

Utilities lead market's recovery

Printer friendly version

Within the past hour, stocks have turned modestly higher with the Dow Industrials (INDU) 8,253 +0.54% now up 44 points and reversing an earlier 155-point decline.

The broader S&P 500 Index (SPX.X) 878 +0.48% has also reversed an earlier lost and trades lockstep with the Dow on a percentage basis.

The move higher looks to have been sparked by utilities as depicted by the Utility Index (UTY.X) 260 +4.14%. The only news I've found to explain renewed bullishness in the group is a note by UBS Warburg saying that today's FERC decision to delay until May 1 the conversion of long-term contracts on the El Paso Corporation (NYSE:EP) $14.45 +1.12% natural gas pipeline system to California is a positive data point for EP, which could open the doors to some near-term upside in EP and other stocks in the group.

A recover in the banking sectors like the S&P Banks Index (BIX.X) 283 -0.96% and KBW Bank Index (BKX.X) 720 -1.13% has helped move the S&P Indexes to their best levels of the session.

I have yet to get an alert at my premium level of $2.20, which I wanted to monitor on a near-term basis with the major indexes close to some swing-traders bearish target levels, so current action depicts that of some short-covering and not necessarily a move higher by new bulls coming into stocks.

With one hour left to go in the trading session, volume is brisk, but not heavy as both the NYSE and NASDAQ show volume at 1.2 billion and 1.3 billion shares respectively.

Breadth has improved from earlier this morning, but still negative at the NYSE and NASAQ. Currently the NYSE and NASDAQ has decliners outnumber advancers by a 3 to 2 margin.

Some improvement is also seen in the new highs versus new lows category with 40 stocks hitting new highs versus 190 stocks at new lows on the NYSE, while NASDAQ's indications remain rather negative with just 22 stocks hitting new highs compared to 221 stocks at new lows.

Jeff Bailey
Senior Market Technician
Option Investor

Intraday Update Archives