S&P 500 Index Slips Off Record Highs

After setting an all time closing high last week, the S&P 500 index (SPY) fell 0.45% yesterday to start off the month of April.

The Dow Jones Industrial Average (DIA) slid 0.04%, the Nasdaq 100 (QQQ) dropped 0.87% and the Russell 2000 (IWM) was the day’s worst performer with a loss of 1.34%.

VIX, the CBOE S&P 500 Volatility Index (VXX) also known as the “fear index,” climbed 6.93% to close at 13.58, above its 50 day moving average but still below its long term average of 20.

Yesterday’s declines were largely triggered by a decline in the Institute for Supply Management’s index which fell to 51.3 from last month’s 54.2 and missed expectations of a 54.2 reading.

This follows last week’s disappointing Chicago PMI which also declined and missed expectations.

Also, the Markit PMI reading for March fell to 54.6 from last month’s 54.9. The one piece of good economic news yesterday was February Construction Spending which climbed 1.2% compared to the previous month’s decline of -2.1%.

Today’s economic reports include factory orders and motor vehicle sales.

The S&P 500 (SPY) still has yet to breach its intraday high of 1576.9, last seen in October, 2007. David Stockman made splashy headlines with his forecast of a market crash and his views of crony capitalism and the problems of the financial system.

Stocks were also weak in Asia to start the month with Japan’s Nikkei dropping 2.12%.

Apple Computer (AAPL) dropped 3.11%, giving up recent gains and slipping back below its 50 day moving average.

For the day, major sectors finished mostly in the red:

Consumer Discretionary (XLY) -0.75%

Technology: (XLK) -0.66%

Industrials (XLI) -1.22%

Materials: (XLB) -0.87%

Energy (XLE) -0.20%

Financials: (XLF) -0.49%

Utilities (XLU) -0.23%

Health Care: (XLV) +0.13%

Consumer Staples (XLP) -0.05%

Bottom line: S&P 500 (NYSEARCA:SPY) continues to face technical and fundamental headwinds after last week’s record high close. Further upward momentum will require positive economic and earnings reports in upcoming days.

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