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S&P 500 Makes a Record High, but Darkness Lurks Within


Today's financial recap and tomorrow's financial outlook.

The S&P 500 (INDEXSP:.INX) set a new all-time high Friday at 1924.03 before closing at 1,923.57, up 0.2%.

Economic data was mixed today.

Personal spending fell 0.1% in April vs. the 0.2% gain expected by economists, though last month's print was revised up to 1.0% from 0.9%. Personal income rose 0.3%, which was in line with expectations. The PCE deflator rose 1.6%, also in line.

The final May reading for the University of Michigan Consumer Sentiment Index was 81.9, slightly below the average forecast of 82.5.

On the bullish side, the ISM Milwaukee Index increased to 63.49 in April, exceeding the 52.0 consensus by a significant margin.The May Chicago Purchasing Manager Index also impressed at 65.5, beating the 61.0 expected.

Even with the record high, the action below the surface looked decidedly weak. The Russell 2000 (INDEXRUSSELL:RUT) finished 0.5% lower as small caps continue to see profit-taking following the 6% bounce off the May 15 interim low. There was additional weakness in other key momentum areas like emerging markets, biotech, and social media stocks.

In earnings, high-profile big-data play Splunk (NASDAQ:SPLK) fell 16.4% despite reporting better-than-expected first-quarter earnings results. Its guidance was not strong enough to impress investors, and multiple Wall Street analysts cut their target prices on the stock.

Networking equipment company Infoblox (NYSE:BLOX) hit an all-time low, falling 36.8% on $12.96 after its guidance disappointed investors.

Both Splunk and Infoblox set single-day volume records today.

On the plus side, retail stocks outperformed, with big-box names like Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Costco (NASDAQ:COST) finishing in the green. Apparel stocks also did well, with Ann Taylor (NYSE:ANN) and Genesco (NYSE:GCO) both staging healthy rallies despite mixed earnings results.

Shares of Madison Square Garden (NYSE:MSG) advanced 3.3% after the New York Rangers hockey team advanced to the Stanley Cup Finals.

In fixed income, the 10-Year US Treasury yield rose 1 bps to 2.457% following Thursday's sharp decline to 2.402%.

Tomorrow's Financial Outlook

Over the weekend, the May China Manufacturing PMI and May Japan Markit PMI numbers will be reported. The China number in particular will be closely watched.

Domestically, at 10:00 p.m. EDT Monday, investors will receive the April Construction Spending and May ISM Index reports.

Apple (NASDAQ:AAPL) starts its week-long Worldwide Developers Conference on Monday, but major new product announcements are not expected.

Twitter: @Minyanville

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No positions in stocks mentioned.

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