Monday gave the Nasdaq Composite the opportunity to join the S&P 500 in setting a new record high.
The Nasdaq Composite index hit at 12-year record high of 3,396.21 during intraday trading on Monday, thanks to a 2.38-percent advance by Apple (NASDAQ:AAPL). Barclays raised its price target on Apple from $465 to $525, and the iPhone maker spent most of the day above $460. Once again, the S&P 500 (NYSEARCA:SPY) was not the only index setting a record high.
Monday’s big winner was Tesla Motors (NASDAQ:TSLA), which skyrocketed 9.07 percent as gamblers jumped on-board in advance of Wednesday’s earnings report. On Monday, the company announced it had hired Chris Porritt as its vice president of vehicle engineering. Porritt had earlier been employed as chief engineer of vehicle engineering at Aston Martin.
Cliff’s Natural Resources (NYSEARCA:CLF) jumped 5.52 percent to $21.01 as the stock was upgraded by Mitesh Thakkar from Market Perform to Outperform. Unfortunately, the jump did not do much for the materials sector, which made a modest 0.28-percent advance.
The Dow Jones Industrial Average (NYSEARCA:DIA) slipped by only 5 points from Friday’s record-high close to finish Monday’s trading session at 14,968 for a 0.03-percent dip. The S&P 500 advanced 0.19 percent to close at yet another record high of 1,617.50 after setting a new intraday record high of 1,619.77.
In other major markets, oil (NYSEARCA:USO) advanced 0.38 percent to close at $34.14. On London’s ICE Futures Europe Exchange, June futures for Brent crude oil advanced by $1.16, or 1.12 percent, to $104.87/bbl. (NYSEARCA:BNO). June gold futures advanced by $5.30, or 0.36 percent, to $1,469.50 per ounce (NYSEARCA:GLD). Transports remained in overdrive on Monday, with the Dow Jones Transportation Index (NYSEARCA:IYT) surging 1.36 percent.
European stocks declined after the final Markit Eurozone PMI for April came in at a contractionary 46.9 and Eurostat reported that euro zone retail sales declined by 0.1 percent in March. For the 27-nation European Union, March retail sales fell by 0.2 percent (NYSEARCA:VGK).
The Euro STOXX 50 Index finished Monday’s trading session with a 0.48-percent decline to 2,750 — remaining above its 50-day moving average of 2,656. After breaking above its overhead resistance level of 2,700 on January 21, the STOXX 50 continues to test resistance at that level, which had been a barrier since the beginning of the year.
In Japan, the Tokyo Stock Exchange (NYSEARCA:EWJ) was closed on Monday, which was the last day of the Golden Week. Trading will resume on Tuesday.
In China, stocks made a big advance despite disappointing PMI data from Markit Economics. The HSBC China Services Business Activity Index dropped to 51.1 in April from 54.3 in March for the weakest expansion of service sector activity since August 2011. The April HSBC China Composite PMI (which covers both manufacturing and services) declined to 51.1 from 53.5 in March, indicating the weakest rate of expansion since last October. The Shanghai Composite Index (NYSEARCA:FXI) jumped 1.17 percent to 2,231. Hong Kong’s Hang Seng Index (NYSEARCA:EWH) surged 0.99 percent to 22,915.
Technical indicators reveal that the S&P 500 is climbing further above its 50-day moving average of 1,559 after hitting a new record-high close of 1,617.50 — motivating bears to hope that we are watching the formation of a head-and-shoulders pattern, which would signal a decline. Its Relative Strength Index advanced from 64.15 to 64.91, holding below the threshold level of 70. Most investors consider a RSI above 70 as an “overbought” signal. The MACD continues to make a further break above the signal line, suggesting the likelihood of a further advance.
For the day, most sectors finished solidly in positive territory, though not utilities, consumer staples, and healthcare. The financial sector led the group as the lone one with an advance in excess of one percent.
Consumer Discretionary (NYSEARCA:XLY): +0.32 percent
Technology (NYSEARCA:XLK): +0.48 percent
Industrials (NYSEARCA:XLI): +0.64 percent
Materials (NYSEARCA:XLB): +0.28 percent
Energy (NYSEARCA:XLE): +0.68 percent
Financials (NYSEARCA:XLF): +1.06 percent
Utilities (NYSEARCA:XLU): -1.39 percent
Health Care (NYSEARCA:XLV): -0.65 percent
Consumer Staples (NYSEARCA:XLP): -0.73 percent
Bottom line: Monday’s record-setting stock market bullishness was the result of good news about particular companies, rather than any economic data or government reports — demonstrating how the slightest sparks of upbeat information can send the bulls out for another record-breaking romp.
John Nyaradi is the author of The ETF Investing Premium Newsletter.