Rally Fades as Bears Push Support

2:10pm (EST)

The bulls were motivated to start today’s session higher following Tuesday’s setback and quickly gained the momentum to the push the market higher. Better-than-expected economic news provided some strength but weaker Tech earnings and a report which showed a much larger-than-expected buildup of crude oil inventories have stalled the rally.

The Producer Price Index (PPI) report showed prices rose 0.2% compared with expectations for an increase of 0.1%. The core reading, which excludes food and energy, rose 0.4%, versus expectations for an increase of 0.2%.

Oil is up a buck and near $88 a barrel after the Department of Energy (DOE) said inventories showed a buildup of 4.2 million barrels versus expectations for a draw-down of 500,000 barrels.

The Dow is declining by 58 points to 11,348 and is just below the 11,350 level we have been outlining all week. The index has traded to a low of 11,322 and a close below 11,350 would trigger 11,200 as the next area of support. A close above 11,350 would still bring 11,600 into play.

The S&P is down 5 points to 1,187 after touching a high of 1,208. The break below 1,200 favors the bears as they target 1,175 next then 1,150. A close above 1,200 still keeps 1,225 in play.

The Nasdaq is off by 30 points and is trading at 2,495. Tech has been weighed down by Dell (DELL, $14.20, down $1.61), which missed earnings while lowering guidance, and is below the 2,500 level. This area will be the battle ground going into the close.

We have a lot to over inside our Members Area so we have to cut it short today. We will be back in the morning with a complete update but please make sure you take us up on our offer from this morning to get our Weekly Wrap at no charge for a month.

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Rally Fades as Bears Push Support

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