Stocks flat, earnings could pierce resistance
The S&P 500 met tough resistance on Monday, with the next major catalyst that could push stocks higher not expected until quarterly earnings reports start to arrive next week.
Investors were cautious against a backdrop of geopolitical risks that have weighed on equities for months.
The benchmark S&P 500 hovered near 1,333, which it has not closed above since mid-February. The level is double the 12-year low hit in March 2009 and not far from 1,344, the S&P's highest since June 2008.
Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said earnings season would likely push the S&P 500 to 1,400 by mid-May as stocks come off the seasonally strong November-April period.
If we make a successful break from here, I think you've got the 1,400 range and I think that's probably likely during the final seasonally favorable push, he said.
On Friday, the S&P recorded its best two-week period since December, and the Dow industrials <.DJI> hit their highest intraday level since June 2008. Encouraging jobs data during the week helped cement hopes of a labor market recovery.
The Dow Jones industrial average <.DJI> gained 20.93 points, or 0.17 percent, to 12,397.65. The Standard & Poor's 500 Index <.SPX> rose 1.04 points, or 0.08 percent, to 1,333.45. The Nasdaq Composite Index <.IXIC> added 2.77 points, or 0.10 percent, to 2,792.37.
The lack of significant economic data on Monday, nuclear and other quake-related problems in Japan and unrest in Libya, Syria and other countries in the oil-rich region of North Africa and the Middle East could translate into low volume on Wall Street. By midday the volume was the lowest so far this year and followed the lowest weekly volume of 2011 last week.
Brent crude extended gains to a 2-1/2-year peak above $120 a barrel on concerns over Libya's conflict, Middle East unrest and potential supply threats. Investors are concerned that a spike in oil could choke off a consumer recovery.
Richard Ross, global technical strategist at Auerbach Grayson in New York, said the S&P 500 could retake its yearly high this week.
I think the market has enough inertia and the retest of 1,344 is in store, he said. We're looking for a marginal new high on the S&P 500 setting you up for the next leg of the advance.
Japanese investment bank Nomura maintained a neutral view on semiconductor stocks, citing weakened demand, peak gross margins and higher capital spending in the sector.
The Philadelphia semiconductor index <.SOX> fell 1 percent and has lost 2.9 percent over the past four days.
Pfizer Inc
rose 0.8 percent to $20.55 after the drugmaker agreed to sell its Capsugel unit, the world's largest maker of hard capsules, to private equity firm KKR & Co
Shares of defense contractor General Dynamics
Southwest Airlines Co
(Reporting by Edward Krudy; Editing by Kenneth Barry)
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