Market Wrap-Up for May 7 (MELI, VNO, ANF, EOG, TIF, more)
As the bulls continue to try and maintain the Dow 15K levels (not that it matters all that much — see below), earnings and analyst calls continue to account for much of the stock price action we are seeing.
On the earnings side, investors were buying up the results from the likes of MercadoLibre (MELI) and EOG Resources (EOG). On the flip side, we saw sellers react negatively to the earnings reports of Cimarex Energy (XEC), Emerson Electric (EMR), and Vornado Realty Trust (VNO). On the analyst side of things, we had a retail sector focus split with a bullish call on shares of Abercrombie & Fitch (ANF) and cautious commentary in regards to Tiffany & Co. (TIF).
Will the Dam Burst?
As we have seen many times before with the markets, investors like to see markets not only pass through significant round number milestones (Dow 15K), but also to see the averages blast through these psychological barriers as well. Technicians tend to flock to these events with their bullish (“head and shoulders breakout”) or bearish (“triple top”) thesis on what to expect next.
If you are a long-term investor, you must quickly get over the short-term infatuation with round numbers, be they in single stock prices or market averages. The main thing to focus on is how individual stocks you are either holding or considering making a purchase in are performing. It is a market of stocks as much as it is a stock market. Finding the names that best suit your investment perspective is what matters in the end. If you are an index investor, you may find solace in averages moving higher, but we prefer the opportunity to own a more direct group of names, rather than an index that can often times be a bit too diversified, and thus offering less returns on our investment (not to mention lower yields). To each investor his own, of course. It’s simply a matter of what investment style ultimately fits best.
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