For a Change, Some Gains; Stocks Nearly Recover Monday's Losses

Stocks shook off Monday's downdraft, nearly reversing all of Monday's losses, but not quite, and the effort was very half-hearted on low-to-average volume.

This was wholly expected, as markets seldom go straight up or down. Some buyers saw value in beaten-down names; banking stocks were particularly strong with names like Bank of America (BAC), Citigroup (C) and JP Morgan Chase (JPM) all sporting solid gains.

Stocks were buoyed by early-day catalysts in the form of fairly robust data on durable goods, the S&P/Case-Shiller residential real estate series and an exceptionally high level of consumer confidence of 81.4 from the Conference Board, the highest such reading since January of 2008, which is somewhat ironic, as that high confidence figure came just months before one of the worst stock market crashes in history and a lengthy, deep recession.

New home sales showed gains in May up from 466K in April, to 476K, though figures may be skewed somewhat as they are for signed contracts, not closings, and are for a reporting period prior to interest and mortgage rates rising.

The major indices are still in a dicey spot, well off the May 28 highs and showing losses for the month of June, historically the weakest month for stock returns. And, with August and September - also weak months by historical standards - just ahead, the stage is set for earnings to move the market one way or the other, though indications are that the second quarter will not be favorable for stocks. Pre-announcements are running 7-1 on the negative side, a chilling effect on taking positions in advance of earnings and perhaps an element of today's less-than-awe-inspiring one-day bounce.

Plenty of technical damage has been done to markets over the past 2 1/2 weeks and the Federal Reserve is employing the only pokicy tool it has remaining - jawboning the market by trotting out one Fed governor after another with carefully crafted speech-lines, jokingly referred to as the "other" FOMC, or Federal Open Mouth Committee.

The question of the day was whether good news on the economy is actually bad news for stocks, insofar as Bernanke has promised to taper bond purchases if the economy shows strength, a move that in all likelihood will continue the rise in rates and place bonds in a much better position, vis-a-vis stocks. If such is the case, the market should have turned lower, but the recent selling prevented that, though in the back of every traders mind, the new reality of a market without artificial stimulus from the Fed looms largely.

Dow 14,760.31, +100.75 (0.69%)
NASDAQ 3,347.89, +27.13 (0.82%)
S&P 500 1,588.03, +14.94 (0.95%)
NYSE Composite 8,996.01, +103.98 (1.17%)
NASDAQ Volume 1,556,236,875
NYSE Volume 3,720,042,250
Combined NYSE & NASDAQ Advance - Decline: 4983-1582
Combined NYSE & NASDAQ New highs - New lows: 105-185
WTI crude oil: 95.32, +0.14
Gold: 1,275.10, -2.00
Silver: 19.53, +0.033