Stock indexes struggle between support, resistance

The breakdown into Sunday evening was mirrored in early trade Monday morning before the indices finally struck stronger support at 4:00 a.m. ET. Two-wave corrections are common in the market and the second move brought the futures into a 50% retracement zone as the market took back half the gains from Friday's employment run. After striking support, however, the market lacked direction and floundered along throughout most of the session.

Although the predominant intraday trend was higher, the move was marked by choppy trade and a lack of decent reward to risk ratios in index-centered strategies. The market was also short on strong intraday movers in individual stocks for those that did pull away from index trading alone.

The forex market offered more to market participants throughout the morning than the indices overall and was one of the best outlets for intraday traders for the day, but forex action died down after 13:00 ET.

S&P 500 (Figure 2)

Index Wrap-up

The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 17.10 points, or 0.13%, and closed at 12,845.13. Eleven of the Dow's thirty index components posted a gain. The top performers were Bank of America (BAC) (+1.66%), Procter & Gamble (PG) (+1.18%), and Disney (DIS) (+1.15%). The weakest performers were Travelers (TRV) (-1.31%), Pfizer (PFE) (-1.18%), and Boeing (BA) (-1.15%).

The S&P 500 ($SPX) finished the session with a loss of 0.57 points, or 0.04%, and closed at 1,344.33. The only two industry groups to post gains were energy (+1.1%) and telecoms (+0.3%). The top individual percentage performers in the index were Abercrombie & Fitch (ANF) (+9.48%), Sprint Nextel (S) (+6.03%), and Best Buy (BBY) (+3.39%). The weakest industry groups were financials (-0.5%) and materials (-0.5%). The top individual decliners were Medco Health Solutions (MHS) (-8.08%), Humana (HUM) (-5.40%), and Express Scripts (ESRX) (-4.65%). MHS and ESRX shares fell on a report that the Federal Trade Commission could be gathering evidence to prevent Express Scripts' planned purchase of Medco Health. Humana's (HUM) earnings were in line with estimates, but revenue fell short of expectations.

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