Stocks are grounded for now, after flying high yesterday on Fed Chairman Ben Bernanke's soothing comments about inflation. The markets look flat to mixed ahead of the open and a bunch of economic data. More testimony from Bernanke and several key data points could determine direction.
Yesterday's market performance was significant for many reasons. "We are in a runaway bull market," says our Larry Kudlow, and that bull could keep running. We have the just right "Goldilocks" investment environment and there's lots of liquidity, he says.
For the first time since March, 1998, the Dow Jones Industrial Average, the Dow Transports and the Dow Utilities all closed at new highs, a bullish sign for Dow theory watchers. While the Dow hit yet another record, the S&P rose to a level not seen in more than six years and the Nasdaq rode higher on the back of strong buying in technology. The Dow also hit a new intraday high of 12,759.
"Gentle Ben tamed the market bears," says our Rick Santelli. "Stocks took their cue from Bernanke's comments. He really didn't raise the notion of a tightening anytime soon. That's why equities loved it … I think he acknowledged that the economy's experiencing decent growth ... I think he acknowledged in many different ways that housing seems to be doing better anecdotally," says Santelli.
Today, Bernanke testifies on the economy before the House Financial Services Committee.
Data that could impact the markets today includes the Empire State Manufacturing survey, import prices, industrial production and the Philly Fed survey. The sometimes market moving National Association of Home Builders survey is released at 1 pm New York time. Tokyo and Hong Kong shares rose overnight, with Japan's strong GDP numbers giving a boost to its market and the yen. Europe though is mostly lower as some major companies there report earnings.
DaimlerChrysler shares continue to move up on speculation about the fate of the Chrysler division. Yesterday's shocker from the company came when it revealed it was looking for options for the money losing Chrysler unit.
This news came as Daimler announced a major restructuring that would result in plant closings and 13,000 Chrysler layoffs. Today, Bloomberg takes that story further by citing sources who say Chrysler and GM are in talks about a possible design alliance. The talks were characterized as early stage and aimed at possible sharing of chassis designs and other cost cutting moves. GM did not comment yesterday when asked if it was in talks to enter a more significant deal with Chrysler, a story started in a German publication.
Speaking of Grounded
Lots of angry passengers were trapped on planes at New York's JFK Airport yesterday for 7, 8, 10 hours. Jet Blue apologizes and says anyone trapped for more than three hours will get a refund and a free roundtrip flight.
"It was all chaos," says one little boy interviewed by NBC. Our Rebecca Jarvis is at the airport to help explain.
Coincidentally, in seemingly unrelated action, Goldman Sachs upgraded Jet Blue to buy overnight and cut AMR to neutral.