S&P 500 sets new highs, but May uncertainties await

An early sell-off turns into a rally. The question now is if the stock market will weather the next few months.

By Charley Blaine Apr 30, 2013 7:24PM
Stock market report © Photodisc Blue/Getty ImagesIn years to come, we will praise the stock market's April performance. We will praise April because the market has risen for each of the past five Aprils -- and fallen in May for the last three years.

The Standard & Poor 500's ($INX) finish on Tuesday was both a new closing and intraday high. It came close to hitting 1,600 for the first time. The Dow Jones Industrials ($INDU) finished with its second-highest close ever. Moreover, it was the eighth straight year the blue chips have ended higher in April. And the Nasdaq Composite Index ($COMPX) ended the month at a 12-and-a-half year high.

All of this came as Apple (AAPL) sold $17 billion worth of bonds, and traders said the tech giant could have sold $50 billion. Its shares jumped $12.66 to $442.78 and are up 15% since hitting an intraday low on April 19.

Back to May: the month was not only forgettable in 2010, 2011 and 2012, but each of those Mays signaled start of a pretty nasty pullback.

Does that mean May will be awful yet one more time? Hard to say; except that U.S. stocks have had a big run so far this year, with the major averages up 10% or more for the year. And there are some technical concerns as well.

Plus, the domestic and global economies look to be slowing. That picture will sharpen into better focus this week, when the Federal Reserve releases its interest-rate statement on Wednesday and the Labor Department reports on unemployment and payroll jobs on Friday.

So, let's give April a nice sendoff. The Dow ended the day up 21 points to 14,840, 25 points below its peak close of 14,865.14, reached on April 11. The S&P 500 finished up 4 points to 1,597.57, both a closing and an intraday high. The Nasdaq closed up 22 points to 3,329, its best finish since Nov. 7, 2000.

The Dow, up 1.8% for the month, has gained 13.3% for the year. It's had gains for five straight months, its longest monthly winning streak since 2009. The S&P 500 gained 1.8% for April and has enjoyed a 12% gain so far this year. The Nasdaq clawed its way to a 1.9% gain for the month; it's up 10.2% for the 2013.

The S&P 500 and Nasdaq have enjoyed six straight monthly gains, their best monthly streak since 2009.

The market's finish was dramatic: The Dow was down as many as 84 points around 10:30 a.m. ET -- and then rebounded smartly to the close.

Crude oil (-CL) ended the day down $1.04 to $93.46. Crude was down 3.9% for the month and is up 1.8% this year. Gold (-GC) gained $4.70 to $1,472.10 an ounce, but it ended April down 7.8% and is down an astonishing 12.2% for the year. Silver (-SI), up 2.2 cents to $24.14 for the day, still finished down 14.8% for the month and is down 20.1% for the year.

The stock market's performance this year is notable for its divergences. Sprinting ahead have been the utilities and healthcare sectors, up 15% and 12%, respectively. Laggards include materials and technology stocks, up 4% and 5% respectively. Sizable spreads between sectors can be signals of trouble ahead.

The Dow's 21 winners for the month included Microsoft (MSFT), up 15.7%; DuPont (DD), up 10.9%; and Walt Disney (DIS), up 10.6%. Disney, in fact, hit new intraday and closing highs on Monday: $63.25 and $63, respectively. (Microsoft owns and publishes MoneyNOW, an MSN Money site.)

The losers were Hewlett-Packard (HPQ), down 13.6% for the month, followed by IBM (IBM), down 5%, and General Electric (GE), down 3.6%.

The S&P 500's April winners were First Solar (FSLR), up 72.7%, followed by Gamestop (GME), 24.8% and Akamai Technologies (AKAM), up 24.3%. A total of 304 S&P 500 stocks were higher.

The biggest S&P 500 laggards were Newmont Mining (NEM), the largest domestic gold miner, down 22.7%. It was followed by Edwards Lifesciences (EW), down 22.4%, and Cognizant Technology Solutions (CTSH), down 15.4%.

The Nasdaq-100 Index ($NDX) gained 2.4% for the month and is up 8.5% for the year. Leading the 60 winners were Vertex Pharmaceuticals (VRTX), up 39.8%; Akamai; and Regeneron Pharmaceuticals (REGN), up 22%.

The laggards were Cognizant Technology Solutions; F5 Networks (FFIV), down 14.2%; and Citrix Systems (CTRX), down 13.9%.

Interest rates ended the month lower. The 10-year Treasury yield, the primary determinant of mortgage rates, closed at 1.675%, up slightly from Monday but down from 1.85% on March 28. The 2012 close was 1.76%.

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May 1, 2013 6:17AM
Divestification: We did this to the phone company back in 1984. We broke up an oligarchy and made small enterprises out of the pieces. We didn't keep our thumb on them so they grew back quickly and became many pariah businesses instead of better ones than the original. We didn't learn anything. A sober view of business today sees behemoth oligarchies chock full of administrators but no enterprise. Paper and button pushing is a dollar-an-hour job at best. There are millions of laws regarding business practices but today's management can't abide by them because they were groomed not to. Congress writes more but never goes back to see why the last one didn't work. We're losing the war against bad weeds, sleaze and the stuff that destroys even the greatest of nations. IF IT DOESN'T EMPLOY ALL AMERICANS THAN IT DOESN'T DESERVE OUR ECONOMY. Abolish the "business platform". If we want globalization, then sending these crap rackets off our shores HELPS them, right? We can rebuild our entire infrastructure and economy BEST by getting rid of what ails us-- over-organized BUSINESS and it's elected puppets taking pay in Congress as we decay. TODAY people. It's nice outside.
May 1, 2013 6:10AM
If you believe this market surge is purely a natural result of an improving economy, you might want to take your cue from history and sell in May and go away.  But, if you believe this surge is nothing but a reflection of the activities of the federal reserve, including the injection of $85 billion/month into the economy, why sell in May?  QE doesn't take the summer off.  If you're in it to win it, let it ride, adjusting your stop-limit points all along the way.  Bernanke will keep sending the checks every month, and it's not like anyone has to worry about whether he has enough in the account to cover them.

A week ago Friday, on one of Mirhaydari's blogs, I predicted the Euro would touch 1.315 within a week.  I was off by a couple of days, but that trade has still worked out nicely.

May 1, 2013 6:06AM
The whole nation needs to take a really good look at itself. We bail banks, support completely bogus business platforms and apply $85 billion a MONTH in newly printed fiat (unsubstantiated) money into markets that do not benefit us. Our Congress-- elected by US-- doesn't represent US. Our President bitches about Congress but the truth is, he was unqualified for the role and TWICE he won because the other guy was just that much worse. It costs millions to run for a minor political office. The only thing I want for ALL Americans now is-- total destruction of data warehouses, fully regulated reconciled reined-in real banks (Goldman Sachs & Morgan Stanley aren't real banks), a flush-out of currently elected officials and banning of them ever running again, a reconciliation of BOTH parties- then abolish them, BUT no crap replacements like the Tea Party. It's WE THE PEOPLE folks... but we've gotten away from that by being bogged down with minutia. S & P? New record? They're DEAD businesses playing casino in the markets with money our great great great great grandkids will still be trying to pay off. They fired competence and replaced it with bookies. End this crap. WE must end this crap. It's all funded by Bernanke. ALL of it.
May 1, 2013 11:46AM
Some folks don't want to admit it but clearly a large part of the Debt under Obama is clearly due to the failed polices of Bush. Stating that Obama is waging War on the Middle-Class is laughable at best. Compared to Bush, Obama is a Saint for the Middle-Class. However, Obama can't stop Companies from keeping Record Profits and Cash on Hand only for the CEOs and their pawns. Obama can't stop companies from shipping Jobs overseas to folks working at slave labor rates. Obama can't force companies to pay a living WAGE.

What Obama could have done, canned Uncle Ben and let the Bush Tax Cuts expire. Other than that, the 800 pound Gorillia which is the 500 trillion dollar plus Derivatives Markets had already left the Barn. We are still paying a Huge Price for that. Witness the ongoing Massive Global Money Printing. Witness the failing economies across the Globe.

May 1, 2013 10:05AM

V_L......"Divestification" on the Telcom AT&T, but your premise is pretty accurate..

The 7 other Enterprises, weren't piker business though...

And now today, many have re-mergered to become basically what they were..

They were a "regulated monopoly", before;  Today I'm not really sure they are quite the same.

AND The Consumer gained "nothing" in the long run..


Maybe I mis-read your first word unless you changed it..??

May 1, 2013 8:10AM
There are no May uncertainties. The Global Feds will still be printing like their pants are on fire and the folks on WallStreet will still be Pumping and Dumping stocks and bonds to everyone else. I suspect those at the top will be unloading record amounts of stocks while telling you to buy buy buy.

The Obama economy is no more proof of an improving economy than the Bush Economy was. If anything, the Bush recovery was far more bogus. Why? Recall that the Bush Economy was built around the over 500 trillion dollar derivatives Markets. Obama and Uncle Ben have to still deal with that SCAM. Problem is Uncle Ben promoted that Scam during the Bush years. Uncle Ben is attempting to continually protect those same Scam Artist with a few trillion, now. Eventually gravity will take over and all global currency will collapse.

It's unfortunately a self-fulfilling prophecy of biblical proportions.

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