Stocks Look to Shake Free of 1999's Early Rut
By Justin Lahart
Senior Writer
3/8/99 9:19 AM ET
The market has been stuck these last couple of months between 1215 and 1275 on the S&P 500. In the second half of last week, stocks went from the bottom of that range to the top of it.
That's a big move -- nearly 5% from Wednesday's intraday low to Friday's close. After traveling that far, one would expect stocks to take a pause. But the strength of last week's rally, and the government's announcement today it had settled with Intel (INTC:Nasdaq) ahead of the antitrust trial with the chip giant, suggests the market is ready to break free from its two-month rut.
"For the first time in a long time, we had decent internals," said Todd Clark, head of listed trading at Charles Schwab. The strong advance/decline line, good volume and participation by a ton of different groups suggest that the market may be broadening. "They closed them on their highs," said Clark. "It looks like they're going to keep them going a little bit."
Yet Clark wonders if the market will have the strength to push through its ceiling today. The thing he's watching is the March S&P 500 contract, which has consistently stalled out at about 1290. "We're going to try to get back up into that zone," he said. "I don't know if we're going to have enough juice to get through it."
Even if it doesn't crack that ceiling today, anticipation of a breakout will probably limit any downside in the market. It also helps that the Treasury market is behaving and that a string of mergers got announced this morning. It helps too that, here in the midst of confession season, there aren't any new earnings warnings from name-brand companies.
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