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Stocks bounced amidst heavy volume following frequent swings in and out of positive territory, after the latest economic data and a fresh pullback in commodity prices left investors unsure over the outlook for economic growth and interest rates. Investors took in mixed readings on the economy and sinking crude and gold prices. However, in the final half hour of trading, the oversold market attracted new buyers.

Today, the Dow Jones industrial average closed up 18.97 or 0.17% to 11,117.32, the broader Standard & Poor’s 500 index closed up 1.99 or 0.16% to 1,258.57, and the Nasdaq composite index closed up 10.41 or 0.48% to 2,169.17.

Market breadth was negative and the volume was among the heaviest of any session this year. On the New York Stock Exchange, decliners beat advancers by a margin of 19 to 13 on volume of 2.259 billion shares. On the Nasdaq, losers topped winners by a margin of 8 to 7 as 2.635 billion shares changed hands.

The numerous swings in the market today show that investors reacted to data showing both weakness and strength and volatile activity in other markets. It is opined that the markets are not going meaningfully lower from here. We are at valuation support and the downside is limited. We’re still trying to shake out those last sellers before the market makes a move higher. On a fundamental basis, the market is worried about slowing growth. The gains in the bond market over the past few days show the market is now less worried about inflation, and more about the impact on corporate earnings of a slowdown in the economy.

Orders for new U.S.-made durable goods fell 4.8% in April, against the expected fall of 0.6%. The fed fund futures market has priced in a 44% chance of a 0.25% point rate hike in late June, vs. a 60% chance yesterday. However, concern over a slowing economy was somewhat eased by news that sales of new U.S. homes stayed strong in April rising 4.9%. This sent the odds of a quarter percentage point hike back above 50%. Therefore, on the data front, the signals have been mixed.

Shares in General Motors Corp closed up $2.03 or over 85 to $26.51, after Merrill Lynch upgraded its rating on the automaker to “buy” from “neutral.” The broker said the revised rating is based on expectations around 30,000 of the company’s workers will accept its buyout program.

In other news, Sara Lee Corp. said it will spin off its Hanesbrands Inc branded-apparel business as part of its move to refocus on foods, beverages, and household and personal-care products. Hanesbrands includes such prominent apparel brands as Hanes, Champion, Playtex, Bali and Wonderbra. The stock finished the session 1 cent higher at $17.08.

Shares of Computer Sciences Corp.’s fell after the computer services company offered up an earnings and revenue forecast that fell short of Wall Street estimates. Its disappointing outlook came as it reported a fourth-quarter profit that more than halved from year-earlier results that had been boosted by disposals, and as charges weighed on the bottom line. The stock fell 28 cents to $54.41.

U.S. light crude oil for July delivery sank $1.90 or 2.7% to settle at $69.86 a barrel on the New York Mercantile Exchange. The Energy Department reported a rise in domestic supplies of gasoline for a fourth week in a row.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter