Intraday Market Update
Global equity markets around the world continued to trade higher on Tuesday while the gains in the US have just about erased yesterday afternoon's slide that was sparked by the Greek debt rating downgrade from Moody’s. Equities are surging higher despite a large profit miss by retailer Best Buy and worse than expected economic data from the NAHB Housing Index and the Empire State Manufacturing Index. The SP-500 has gained +17 points which exceeded yesterday's high. The index is battling the 1,107 to 1,108 area again which is a key pivot level dating back to the flash crash days of May 6 and 7. The 200-day SMA is also just overhead. If SPX breaks above this area there is an unfilled gap up to the 1,115 level where additional resistance will have to be dealt with. The market internals are strong and the EUR/USD currency pair is gaining strength (trading above 123.00 for the first time in about 2 weeks) so a break out higher is certainly in the cards. SPX 2-hour chart from April 15 to current:

The Empire Manufacturing Index ticked higher in June to a level of 19.57 which was below consensus estimates which called for an increase to 20.00. The previous month’s level was 19.11. Prices paid fell sharply and the employment component of the report dropped from 22.37 in May to 12.35 in June while the average workweek moved from unchanged in May to 8.64. New orders and shipments both improved further into expansion territory. The report is the first major piece of data looking at manufacturing conditions in June. The Philly Fed Manufacturing Index will be released on Thursday and is expected to decline from 21.4 in May to 20.0 in the current month.

The ICSC Goldman Store Sales and Redbook were released this morning, both of which continue to confirm consumer spending is slowing. The ISCS slipped -0.7% compared to the prior week while the Redbook reports year over year same store sales at +2.7% last week which is down from +3.6% in the prior week. The report says traffic is down and warns consumers are cutting back again on discretionary spending. Redbook estimates that sales are down -0.5% from this time last month indicating another month of trouble for the retail sales report.

In other economic news a gauge of homebuilder sentiment as measured by the NAHB Housing Market Index fell to a level of 17 in June, from a reading of 22 last month. The number was below estimates of 21. Any reading below 50 indicates more respondents feel conditions are poor.

In equities, electronics retailer Best Buy (BBY) is down -6% after the company reported Q1 EPS of $0.36 compared to estimates of $0.50. The firm missed revenue expectations as well. On the conference call executives were apologetic, noting that customer spending was highly variable in the last quarter. In addition, the company said that "While our financial results in the fiscal first quarter were below expectations, we remain confident that the strategic investments we are making" will support increased margin expansion during the fiscal year. GameStop (GME) has shed -7% as Best Buy executives discussed a new trade-in plan for used video games, noting that the program will officially launch this summer.

Pre-earnings profit warnings are getting under way ahead of earnings season. Nucor offered slightly disappointing guidance for their Q2 report. After being down -2.7% in early trading shares of NUE have recovered to about breakeven. Shares of Callaway Golf (ELY) are off -7.50% before after the firm cut its guidance for the current quarter by more than half, citing expectations for a slower economic recovery.

Commodities are mostly higher and being led by front month crude and natural gas. The US Dollar is getting remains under pressure which is helping domestic equity markets.

Core Sector List:
Overall reading: 16 sectors advancing, 0 sectors declining.
Strongest Sectors: Semiconductors, Oil Services, Internet
Weakest Sectors: Retail, Healthcare

S&P 500 - Daily and 30-minute Intraday Charts:

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