With stocks rising on Monday for the third straight session, is the stock market rally still intact after last week's hiccup? To find out, let's take a proverbial look under the hood, and check on the performances of some key market groups.
Last week, we finally got some volatility back in the stock market. Wednesday's big sell-off took the S&P 500 below its very tight three-week range — but the bounce on Thursday and Friday took it right back up to the underbelly of that range. This week, it will be interesting to see whether the S&P can fully regain that range (or better).
For the bulls, it was unfortunate to see the late-week bounce come on less volume than did Wednesday's sell-off. That was all the more disappointing given that Friday saw May monthly options expire, and volume tends to pick up on expiration days. On the other hand, breadth was quite good, with more than five stocks in the S&P 500 rising on Friday for every one that fell.
The rebound in the S&P and in the Dow Jones industrial average led both indexes to retrace about 60 percent of their Wednesday declines. It is interesting to note that both the Nasdaq and the XLK tech ETF did not retrace as much of their losses (about 40 percent each). The small-cap Russell 2000 fared even worse, retracing only 30 percent. And the Dow Jones transportation average retraced about 35 percent of it Wednesday losses.