The market struggled to hold its early gains on Monday and finished mixed after the bulls lost their enthusiasm.
The bulls were able to squeeze a fraction of a point for the Dow as it finished at 11,205 after trading as high as 11,258. If it weren’t for Caterpillar’s (CAT, $71.65, up $2.87) powerful results, the Dow would have lost over 22 points which is how much the shares accounted for in the index yesterday.
The S&P 500 fell 5 points to finish at 1,212 but above 1,210 which had been short-term resistance. The index kissed a new 52-week high of 1,219 earlier on Monday and is still above its 10-day moving average.
The Nasdaq also finished lower as it slipped 7 points to settle at 2,522. The Tech-heavy index also hit a fresh intra-day high of 2,535 before it gave up its gains.
There were pockets of strength yesterday and one sector that continues to outperform are the Entertainment/ Movie stocks.
Imax (IMAX, $21.13, up $1.02) continues to amaze us and set another 52-week high. We have been on this company like grass on dirt when shares were at $3 a few years ago and when they broke $10 back in October we mentioned shares could run to $20+. Bingo.
Netflix (NFLX, $108.17, up $8.44) has also blown past our price target of $100 which we set back in November when the stock was in the$50’s and nobody else on Wall Street would touch it.
And what about Walt Disney (DIS, $37.04, up $0.25) which we’ve flirted with a few times by playing call options? That stock also set a new annual high yesterday.
This sector remains white-hot and we think there will be some M&A activity over the next few months that could take this sector even higher.
Turning our focus to the Financial stocks, Goldman Sachs (GS, $152.03, down $5.37) will take center stage today after being blamed for dumping 100’s of billions of dollars of toxic assets into everyone’s lap.
Testimony begins today that will bring Goldman’s CEO, Lloyd Blankfein, and other key executives before Congress. Somewhere Barney Frank is licking his chops. This is going to be great drama and we will probably tune-in to catch some of the action.
As we head to press, futures are pointing towards a slightly lower open. The Dow futures are off by 11 to 11,140 while the S&P 500 futures are down by 6 points to 1,202. Nasdaq 100 futures are off by 5 to 2,046. Subscribers, check the Members Area for the updates.