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Stock market dips despite positive developments

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

Stocks are well off their highs midday with the S&P briefly going negative. Markets were up through the first half of the day on several positive developments:

1) Dovish central banks! Not just the Federal Reserve's Janet Yellen and her continuing comments on housing, but the ECB's Mario Draghi crushed the euro earlier today saying he was open to lowering rates in Europe in June.

2) Signs of life in retail sales! The monthly same-store sales reports are a shadow of what they used to be (there's only roughly a dozen who still report monthly), but for those that do this month was quite strong.

April same-store sales were up 6.0 percent, way better than 3.9 percent expected by RetailMetrics. March, you may recall, was up only 2.8 percent.

Several retailers noted that the shift of the Easter holiday into April was a factor, but still the combined sales of March and April do indicate a pickup.

Cato (CATO) and L Brands (LB) both guided higher. L Brands specifically noted that lower promotional activity was a help. Sales at the company's Victoria's Secret stores were up eight percent year over year, much stronger than expected. There was strength across the assortment, and the company guided May comparable-store sales up in the low single digits.

In other words, Easter was a big help, but it was a little more than just that.

Costco (COST) didn't raise guidance, but reported sales up 5.0 percent, also ahead of consensus.

Several retailers reported earnings well above expectations: Call it The 8 Percent Club. Teen retailer Zumiez (ZUMZ) reported an 8.2 percent increase, well above expectations of an 0.5 percent increase. Discounter Stein Mart said sales rose 8.9 percent.

Gap (GPS) will report tonight.

3) Stability in internet names. Not a raging rally, just stability, with Groupon (GRPN), Twitter (TWTR), Pandora (P), LinkedIn (LNKDN), Netflix (NFLX), etc. all higher.

4) A decent showing for a tech IPO, in this case security-app company Cheetah Mobile (CMCM) priced 12 million shares at $14, toward the high end of the $12.50 to $14.50 range, and is trading up 5 percent midday. That's a positive sign for Chinese tech, especially ahead of Alibaba's IPO.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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