Late Day Closing Comment

A further slide in treasuries (upward pressure on yields) and a modest bid for the Yen conspired to send stocks lower today. Is there any great surprise after 3 days of the market pulling off of the intraday highs in record high territory that the market was looking ripe for a respite? As rates have backed up, one of the big leaders in the rally - the utilities - have been pinched with the Utilities SPDR (XLU) already testing its 50 day moving average. Even non utility dividend paying stocks have been hit hurt as bond yield look more attractive. The DJ Dividend iShares outperformed to the downside today with a decline today of more than 1%.

Chips were also a key ingredient today - the wrong ingredient for the bulls. The spinal tap for investors without the benefit of anesthesia from Network Appliances (NTAP) and its lowered guidance late yesterday and the Komag (KOMG) warning from this morning also weighed heavy on the market. I've noted in recent days that a rise in the market without at least a little leadership from the chips is not a good thing and could be a forward indicator for things to come in the broader market. The Semi Holders (SMH) today completed filling the late April upward gap today on heavier than normal volume.

I'm not by any means declaring the bull dead, but it will be interesting, with the S&P perched at its 20 day moving avg, to see if we don't end up testing S&P 1500 sooner rather than later.