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S&P 500, Russell 2000 Make Record Highs in Sideways Grind


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

The S&P 500 and the Russell 2000 notched new all-time highs today despite disappointing earnings and economic data.

This morning, Wal-Mart (WMT) reported fourth-quarter earnings of $1.61 per share, beating by $0.07. However, its revenues were below analysts' expectations, and the company forecast disappointing full-year earnings due to unfovarable foreign exchange trends and an increase in employee wages.

The stock fell 3.2% to $83.52, and most retail stocks followed suit. The Market Vectors Retail ETF (RTH) finished down 0.8%.

Initial jobless claims for last week came in at 283,000, slightly better than the 290,000 consensus forecast. The prior week's claims were also revised lower to 290,000 from 304,000. However, continuing claims were above expectations.

January Leading Economic Indicators and the February Philadelphia Fed Index were also below expectations.

Crude oil initially fell sharply overnight on a report from the American Petroleum Institute showing an enormous build in crude stocks. Inventory data from the Energy Information Administration was released at 11:00 a.m. ET today, and crude oil took back some losses as the build was not nearly as big as the API data intimated.

The drop in oil contributed to a sharp rally in airline stocks.

For the third day in a row, biotech stocks outperformed and like the S&P and Russell, the NASDAQ Biotechnology Index (NBI) made a new all-time high.

Cybersecurity also continued to show strong upward momentum as sector leader Cyber-Ark Software (CYBR) sharpy reversed off an intraday low of $57.75 to finish at $64.28, up 6.6%. (PCLN) was another notable winner, rising 8.5% on its impressive earnings report.

Financial stocks lagged again today. Yesterday, the Fed signaled that it is in no rush to raise interest rates. An increase in rates would boost banks' net interest margins.

The S&P set a new record high at 2102.13 this morning, but finished at 2097.45, down 0.1%.

In international news, Greece submitted a bailout extension letter. Initial news reports suggested that Germany rejected it out of hand, but later during the day, Greek Prime Minister Alexis Tsipras said discussions with German Chancellor Angela Merkel had a "positive tone".

Tomorrow's Financial Outlook

Greece remains a hot-button issue and headlines will continue to drive the action ahead of tomorrow's meeting of European finance ministers.

There are no major US economic reports on the calendar tomorrow, though the Markit US Manufacturing PMI will be released at 9:45 a.m., followed by the Baker Hughes US Rig Count at 1:00 p.m.

Deere (DE), Enbridge (ENB), and Laboratory Corp (LH) report earnings before the open.

Twitter: @Minyanville

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No positions in stocks mentioned.

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