The market finished this OE session little changed. But for the week as a whole, all three major indices performed pretty well. The Dow was up by 1.9% and the S&P 500 gained 2.7%. The Nasdaq, the best performer among the three, gained four straight days before giving up 0.2% in today’s trading. For the week, it gained 3.4%. The news on the economic front was mixed. On the positive side, we got both Building Permits and Housing Starts unexpected rise from the previous week. On the other hand, one survey of consumer sentiment showed the worst sentiment in 28 years. Crude oil, after a choppy session yesterday, resumed its climb and closed at a fresh historical high.  
Commodities were again leaders in today’s market as money kept pouring into the red-hot sector. The CRB commodity index gained more than 1% while the Baltic Dry Index closed at a new historical high. It is truly amazing to see the BDI index keep hitting new historical highs in May, which is traditionally a slow month for the bulk shipping sector. Just five years ago one can rent a cape-size drybulk ship for less than 10K a day. Today the price tag is well above 210K. That is a 2000% rise in 5 years --- when people talk about 3% or 5% or even 8% inflation rate, we should note that some sectors have experienced price increase well above 1000% in the past few years. Indeed that’s something to keep an eye on. Of course one can blame the broad rise in commodity prices on weaker dollar, which happened to close lower against most major currencies in today’s trading. Treasuries were little changed but traders have already started to build in a small chance of interest rate increase by September. The world is changing faster than ever, isn’t it?

All three major indices finished the session up by around 1%. The Nasdaq, after a failed attempt yesterday to take its 200-day moving average, gained almost 1.5% for the day and closed above the key technical level for the first time since January. The news on the economic front was mixed. The weekly jobless claims came at 371K, matching with market expectation. The continuing claims increased 28K from the previous week to 3.06 million, the third straight week that the number is above 3 million. We also get some mixed results from regional manufacturing reports. The NY Empire State Index, which tracks manufacturing activities in the New York state area, came at -3.2 while economists expected an unchanged reading. The Philadelphia Fed index, on the other hand, came at a better-than-expected reading of -15.6 although the number still suggested severe contraction of manufacturing activities in that region. For the nation as a whole, the overall industrial production for April dropped 0.7%. Economists called for a drop of 0.3%. As a result, the capacity utilization decreased to 79.7% from 80.4% in the previous month. Finally, the home builder sentiment fell in May while economists expected it to be unchanged.
Commodities and technologies were among the biggest gainers for the day. Crude oil had a choppy session before closing its option expiry day pretty much unchanged. The CRB commodity index also changed little. But it’s worth noting that the Baltic Dry Index (BDI) closed above 11K, which was almost 100% higher than merely four months ago and indicated continuing strong demand for raw materials around the world. The US dollar was mixed against the major currencies while treasuries rose modestly. The VIX index cannot stop its recent slump and closed at the lowest level since last October. Following the Dow and the Nasdaq, the NYSE Composite index became the latest key index to crack its 200-day moving average. Will the S&P 500 finally join the group? We have to wait and see. But after a rough start earlier in 2008, the S&P 500 index has trimmed its loss to only 3%. Recession? Go figure!

The market closed the session modestly higher. The Dow, which was up as much as 150 points earlier, finished the day with a 0.5% gain. The economic news of the day was on the positive side. The headline CPI reading for April rose 0.2% compared to 0.3% expected. Excluding food and energy prices, the Core CPI was also better than expected at 0.1%. A pullback in crude oil only helped to fuel the rally.
Transportations were among the noticeable winners for the day. In particular, the Dow Transportation Average closed at a new high for 2008. The Nasdaq became the second major index to challenge its 200-day moving average. Unfortunately, it faced similar fate as the Dow and retreated sharply late in the day amid profit taking. It seems there is strong resistance at this key technical level and the market may need some strong catalyst to break through. The CRB commodity index ended the day modestly lower. The US dollar, on the other hand, moved higher against most major currencies. Treasuries continued the recent slump as money moved out from the previously safe-haven sector and into risky areas. The VIX index, which is usually used as a fear indicator, touched the lowest level since last October before rebounding sharply during the final hour of today’s trading. Maybe it’s a good warning to those investors that became a little too complacent recently.

The market closed in a split fashion on this Tuesday. The Dow, battered by a 5% drop in Hewlett-Packard, posted a loss of around 0.3%. The Nasdaq, on the other hand, closed higher by 0.3% and sit at a fresh 4-month high. The news on the economic front was mixed. On one hand, import prices in April increased a higher-than-expected of 1.8% from the previous month, bringing the year-over-year import inflation to 15.4%. Even excluding fuels, the import costs still rose 6.2%, the largest increase in 20 years. On the other hand, Retail sales excluding autos rose 0.5% in April. Economists expected a rise of 0.2%. As the retail sales number was collected before the bulk of rebate checks was sent out, the outlook for Q2 consumption might even be better than economists currently expected.
Commodities especially many oil service names were among big gainers for the day as crude oil hit a new historical high. Financials, hit by an analyst cutting earnings estimates on brokerages along with fresh concerns on bond insurers’ credit rating, fared poorly throughout the session. The US dollar was strengthened against most major currencies while treasuries were sold off following the stronger-than-expected retail report. As for tomorrow, we are going to get the latest CPI report, which could be a potential market mover.

The market started the new week in a positive tone. All three major indices managed to fully recoup their losses from last Friday then added a few more points. The volume, however, is on the light side. There is little economic news scheduled to be released today although we have tons of economic news late this week. A pullback in the oil price seemed to be enough to offset negative earnings warning from FedEx and another gigantic loss from bond insurer MBIA.
All major sectors ended the day in green. Transportations and technologies were among noticeable winners. Financials, benefited from a positive earnings result from HSBC and comments from James Dimon that the financial crisis is three-quarters over, also fared pretty well. The CRB commodity index retreated a little following the record close in the previous week led by profit-taking in energies. It is worth noting that China’s import of crude oil dropped 4% from a year ago in April, the first such decline in 18 months. The US dollar was mixed against major currencies while treasuries lost ground. The VIX index, which is usually used as a fear indicator, closed below 18 for the first time this year, indicating less volatility in the month ahead. But if history is any guide, volatility often comes at a time that nobody expects. Hopefully things are different this time around.