Afternoon Review

S&P 500: +6.40 (+0.58%)

An unexpected narrowing of the trade deficit and favorable components of the jobless claims report helped the S&P 500 finish higher despite global government debt concerns. Volume was lacking for most of the day as stocks traded sideways for most of the session.

It’s also worth noting that the broad-based gains were made in the face of a stronger dollar, bucking the recent trend. Dollar gains have most often led to selling in the stock market due to the drag of a stronger dollar on commodity prices and repatriated profits from multinationals.

Small cap stocks finished lower today and continue to lag behind larger capitalization stocks this quarter. This trend is typical of a rally that is entering a later, more mature phase. The high beta stocks often see some of the sharpest rallies off the market bottom start to slow down.


Quick Hits

• The dollar’s fall reflects a new role for reserves
  
  

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Peter J. Lazaroff, Investment Analyst