Stocks paused -- and I do mean paused -- yesterday to digest the record-setting run in stock prices last week. The Dow Industrials were down 19 points -- a loss of 0.12 percent -- a decline small enough to be a rounding error.
Stocks paused -- and I do mean paused -- yesterday to digest the record setting run in stock prices last week. The Dow Industrials were down 19 points -- a loss of 0.12 percent -- a decline small enough to be a rounding error. And, out of the gate this morning, the index is up more than 50 points as a series of quarterly earnings reports from retailers came in better than expected. Some market observers will be watching today close very closely. The Dow and S&P 500 have advanced for 18 consecutive Tuesdays, the longest day of the week streak since 1968. Keeping the run alive would be an endorsement of the rally. Snapping it would have the bears jumping up and down with glee.
Much to the disappointment of the doom and gloomers, Goldman Sachs has raised its target for the S&P 500 this year to 1,750 from the current level of 1,666. The index is already up 16.8 percent so far in 2013. In addition, the report calls for the S&P 500 to go up another 9 percent in 2014 to 1,900 and climb by 10 percent the following year to 2,100. Credit rising dividends and improved economic growth for the steady advances. And, if interest rates remain low, the targets for the S&P 500 could be bigger than expected.
One of the retailers reporting earnings this morning was Home Depot, which reported sales of $19.1 billion in the first three months of 2013 and raised guidance for the entire year. "In the first quarter, we saw less favorable weather compared to last year, but we continued to see benefits from a recovering housing market that drove a stronger-than-expected start to the year for our business," said CEO Frank Blake. Home Depot also announced its foundation is pledging $1 million to aid in the rescue and relief efforts in Oklahoma, including an immediate contribution of $250,000 to the American Red Cross.
There is more evidence today of a healthy consumer. The S&P/Experian consumer credit default indices, a composite of various types of consumer loans, showed national default rates in April falling to a post-recession low of 1.42 percent, down from 1.50 percent a month earlier. "Continued improvements in the economy and declining consumer debt are resulting in lower consumer default rates for mortgages and automobiles. Bank cards, where default patterns are more volatile, saw a small uptick in the latest month. These data suggest that for many consumers the recession is definitely behind us," said David Blitzer of S&P.
Gold prices snapped an eight-session losing streak yesterday, up $19.40 to $1,384 an ounce. However, the metal has given all of that and more back in early trading today. Gold is down sharply from its record high of $1,921 an ounce back in September 2011.
The golf world is mourning the loss of one of its most beloved players, Ken Venturi. He passed away last Friday at the age of 82, just a few days after being inducted into the Golf Hall of Fame. Venturi was a great player but is perhaps best known for his work as a television commentator, which is amazing because he suffered from a serious stuttering affliction for most of his life. Venturi, like many players of his generation, had a great career as an amateur golfer and was one of the players featured in the best book ever written about the game, "The Match." Written by Mark Frost, it is the story surrounding a match between two of the greatest players ever in the game, Ben Hogan and Byron Nelson, against two amateurs, Venturi and Harvie Ward. I won't give away the results of the match or the way it came about but even non-golfers will marvel at the true story and the way Frost weaves it all together. You might also want to watch the interview on the Golf Channel David Fehrety did with Venturi shortly before he died. Very emotional.