Intraday Market Update
US markets are under pressure today following mixed economic reports. After teetering between positive and negative territory in early trading, the major indexes started to break lower at about 10:00 AM. The S&P 500 is down -10 points to a critical level near 1,090, which where it broke out yesterday.

According to the Bureau of Economic Analysis, personal income posted a solid +0.4% gain in April, matching the gain from March and meeting consensus estimates. However, in a disappointment consumer spending paused in April after strong gains the prior two months. Overall, personal consumption was flat, following a +0.6% and +0.5% rise in March and February, respectively. The April number fell short of consensus estimates for a +0.2% increase. April was weakened by a drop in non-durables and was mostly price related. There are still no signs of inflation as the headline Personal Consumption and Expenditures price index was flat in April after March posted a +0.1% gain. Essentially, more people are holding on to their money as the savings rate rose +3.6% in April. The rate had fallen to +3.1% in March which was the lowest reading since October 2008.

The Chicago Purchasing Managers Index eased in May, but it did mark the eighth straight month of growth. All business activities showed expansion except employment. Strength in May is led by new orders which held above 60 at 62.7, indicating month over month growth and that a base is in place for future business activity. There was little change in employment in the month with the index at 49.2 which is a disappointment given a string of prior month readings above 50. Inflation for input prices eased as the prices paid index slipped back more than -7 points, but is still hot reading of 64.

Consumer sentiment is improving but at a slow incremental rate. Today's report suggests mild steady improvement beginning in the last two weeks of April and extending through the end of May. This report is different than the consumer confidence report as it doesn't focus on confidence, or lack thereof, in the jobs market. The Consumer confidence report from Tuesday showed improvement as consumer spirits are improving despite troubles in the stock market and questions in Europe.

Commodities are mixed with front-month crude down -0.50%. Gold is down -0.75% to 1,205 per ounce while silver is off by about -1.0%. Natural gas has gained +1.72% and copper is off by -0.40%.

International Markets:
International markets were mixed on Friday. Notable winners in the Asia-Pacific region include Hong Kong (+1.73%), Australia (+1.79%), and Japan (+1.28%). China was flat. European markets were mostly about breakeven or slightly negative with the exception of Spain which was higher by +1.04%.

Core Sector List:
Overall reading: 13 sectors declining, 3 sectors advancing.
Strongest Sectors: Pharmaceuticals, Healthcare, Utilities
Weakest Sectors: Oil Services, Banks, Semi's

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