The stock market continues its drive to a new high on the S&P 500 after the Dow's sprint through the 13,000 level last week. Along the way this week will be a flood of corporate earnings reports, Friday's jobs data, the downhill slide of the dollar and perhaps some nervousness in the oil markets as traders debate whether it makes sense this spring to follow the old adage, "Sell in May and stay away."
But Wall Street has been throwing a big party in the stock market that many investors will find hard to leave. The tantalizingly near-record level of the S&P 500 has become a fixation for traders who want to see the index break a barrier it last reached seven years ago when the tech bubble was at full tilt. The S&P is just 33 points shy of 1527, its high close in March 2000, and 59 points away from its 1553 intraday high.
April may have been cruel to the dollar, but was it ever good to the stock market. The Dow bounded across the 13,000 mark midweek and held its ground to chalk up 158 points, or a 1.2% gain for the week. Month to date, the Dow is up 6.2%, dwarfing March's puny 0.70% gain. Year to date, the Dow is up 5.28%.
Barron's big Money Poll this weekend suggests the road to 14,000 will be slower than the Dow's canter from 12,000 to 13,000. Who doesn't remember February, and think that at any minute volatility can give the market a jolt. The bullish managers see the Dow finishing the year close to current levels. They worry about the U.S. economy and they like foreign stocks.
Other market measures joined the Dow in record territory last week, including the Dow Wilshire 5000 and the Russell 2000.
The S&P 500 rose 9.7 points for the week, or 0.7% to close at 1494. It is still 2.2% away from that 1527 high. The S&P, up 5.2% month to date so far, is on track to score its best monthly gain since October 2003.
The Nasdaq was up 30 points for the week, or 1.2%. It hit a fresh six year high and was up four straight weeks in a row, but still holds about half the value it had in its 2000 peak.
Oil rose $1.40 Friday after the Saudi government arrested more than 170 suspects it said were al-Qaeda linked militants preparing to attack oil and military facilities in the kingdom. That put crude at $66.46, helping to push it 3.7% higher for the week. Gasoline, meanwhile, continues to move higher and was up 10.5% for the week to $2.33613, its highest settle price on the NYMEX since last August.
The dollar's move to a new low against the Euro Friday was one of the big events of the week and our Steve Liesman dug into what it means for corporate America. He found that the quarterly earnings of some big stocks were helped considerably by the dollar's weakness as companies benefited from overseas sales. Those upside surprises have been feeding the stock market's gains.
The dollar fell 0.4% against the Euro last week, its fourth straight weekly decline. The dollar has lost 3.3% against the Euro since Jan. 1.
Our Maria Bartiromo, who was at Milken Institute's annual gathering of the powerful this past week, spent a lot of time talking to business leaders there. "As far as sectors go, people are playing global growth," she said. Hot areas are financials, infrastructure and energy. She said the U.S. multinationals are also a play on the growth that's happening outside the U.S.. while the U.S. economy slows.
Our Rick Santelli says he thinks there might be a reprieve soon from some of the dollar's downward trend. "I personally think we're going to see corrections in everything soon. We might even start to see nibbles now. I think the dollar will firm up against the pound and Euro and that firming will start to cause a correction in U.S. equities. Gold's chart looks like it's definitely coming down. Its technicals have already turned negative. Gold, I think has seen its high price for this move. Interest rates is the one area that's not going to change much. I think we're going to see overseas economic forces continuing to pressure world rates higher," says Rick Santelli.
There is lots of key data this week, but the highlight will be Friday's jobs report.
"What we want to know is will we finally get the weakness we expected from the slowing economic growth," says Liesman, who will analyze the data for us Friday. Last week's surprisingly weak first quarter GDP reported showed growth of 1.3%, the slowest rate in four years, reinforcing what economists have been warning about for months.
Also on the agenda this week are construction spending, personal income and spending, and Chicago purchasing managers reports, due on Monday. On Tuesday, ISM manufacturing data for April is reported, as are pending home sales for March.
Auto sales are also reported that day, and from reports on Reuters last week it appears those results could be weak for domestic auto makers. Reuters quoted Ford Motor's chief sales analyst George Pipas as saying that industry sales have dropped far below expectations for April. Pipas said, "we are not even close to where we expected to be in April."
GM coincidentally started a new incentive program last week aimed at juicing month-end sales. This all follows GM vice chairman Robert Lutz's remarks on Reuters last week that the mortgage market mess is hurting U.S. auto sales. So it was also no surprise when AutoNation CEO Mike Jackson told Becky Quick on Squawk Box Thursday that the subprime mortgage mess seems to be hurting car sales most in markets that had the biggest real estate bubbles.
This coming Wednesday, ADP gives its view of the jobs number and factory orders for March are reported that day. ISM non manufacturing data is released Thursday, as are first quarter preliminary productivity and costs. Initial jobless claims are also released that day. More on the trend for automakers will be seen when GM earnings are reported Thursday.
ON THE CIRCUIT
Treasury Secretary Hank Paulson speaks on China and trade Wednesday in Washington. Federal Reserve Chairman Ben Bernanke speaks on free trade at the University of Montana 11 am on Tuesday. There will be a question and answer session following his speech, but this does not appear to be an audience where Bernanke will get a grilling. We will be watching just in case.
St. Louis Federal Reserve President William Poole speaks Wednesday at a St. Louis community development conference. New York Fed President Timothy Geithner speaks in Montreal Friday at a financial conference, and Kansas City Fed President Thomas Hoenig also speaks that day in Santa Fe, N.M.
RICH AND EVEN RICHER
Making money in the stock market? CNBC will show you how to spend it, or at least how other people do. All day
CNBC will look at
ultra luxury, what's beyond the traditional high end.
We will look at how business is cashing in on the growing divide between the rich and the super rich.
WORKING ON THE WEEKEND
WORKING ON THE WEEKEND
Warren Buffett, who recently told us he was riding the rails, or at least holding a few railroad stocks, presides over the annual Berkshire Hathaway shareholder meeting next Saturday. Our Liz Claman will be there, and if anyone has an inside line to the Oracle of Omaha it is Claman. We look forward to her reports.
The final really huge earnings reporting weeks for the quarter is upon us. Hilton, Kellogg, Verizon, Radio Shack and Humana report Monday morning. On Tuesday, reports come in from Procter and Gamble, Archer-Daniels, Marathon Oil, Vornado, and Yum Brands. Biogen Idec, Allergan, Cigna, Devon Energy, Jones Apparel, Rowan Cos, Teva Pharmaceutical, Sunoco and Symantec report Wednesday. On Thursday morning, CBS, CMS Energy, GM, International Paper, Martha Stewart and Williams Cos report. Starbucks reports after the bell that day. Kodak, Weyerhauser, and Total report Friday.
Intel holds its analyst meeting Thursday.
Lehman holds a retail conference Tuesday and Wednesday in New York. Goldman, Sachs has its alternative energy conference in New York May 2 and 3. Deutsche Bank holds a health care conference in Washington Wednesday and Thursday.
Venezuelan President Hugo Chavez has found a special way to mark May 1 Labor Day on Tuesday. That is the day, he expects foreign oil companies (including Exxon, BP, Total, Chevron, Conoco and Statoil) to transfer facilities to his state run Petroleos de Venezuela SA.
And while Wall Street is partying at work that day, more than a few world stock markets are closed for May Day celebrations. Among them: Germany, France, Argentina, Brazil, China, Greece, Italy, Norway, Mexico, Russia, South Korea, Thailand, Vietnam, Hong Kong, and that's just a few of them.
YOUR MONEY, YOUR VOTE
With the squeezed time frame on primaries this presidential election, it is none too early to get up to speed on the candidates' positions and posturing. After the Democratic candidates first debate last week, MSNBC this week will air the first Republican candidates debate Thursday from the Reagan Library in Simi Valley at 8 pm Eastern time.