The Dow (^DJI) nudged into the green for the first time in 2014, climbing to an all-time high on the exact one-third mark of the year. Blue chip stocks hulking over quicker moving smaller caps reasserted their dominance Wednesday but opened flat on Thursday.
The big indexes have mostly moved sideways as economic growth ebbed in the first quarter and the Federal Reserve stuck to its plan of methodically curtailing its bond-buying. So is this a valid concern or blessing for indexes? Its probably both.
Related: Are social media stocks in a bear market?
As I discuss with Jeff Macke of Yahoo Finance in the attached video, the market has held together despite the poleaxing of many popular, overstretched momentum stocks in the Internet and biotech sectors, the sharp underperformance of small-cap stocks and consumer names looking lethargic.
The market has been relying on the bottom of the lineup for all its offense, with utility and consumer-staples stocks outperforming.
Related: Stocks are not overvalued and investors should buy the dips: Jefferies' David Zervos
From another angle, the fact that the headline indexes have hung together so well shows that big stocks remain in fairly strong hands and cash isnt fleeing equities in a pronounced way. And there has already been plenty of chatter about the fact that the Dow Jones Transportation Average (^DJT) joined the Industrials in making a new all-time high, a so-called Dow Theory confirmation.
Of course, this concept dates back to a 19th century economy of steam engines and paddle-wheel boats, but some still view it as a sign that productive segments of the economy are in rhythm.
One thing going for the market here is that not many traders seem well-positioned for a further burst to the upside, which could mean the markets penchant for ironic, counterintuitive moves will produce exactly that.
From a big-picture view, the main feature of the 2014 market seems to be digestion -- the consolidation of a huge 30% up year in 2013 and five-year run showing the S&P 500 up 180%, with the economy inching ahead, profit margins already rich, the Fed slowly retreating and yet copious liquidity and a healthy corporate sector.
Related: Stocks rally but this bull sees more pain ahead
I suggested in a column last week that we might be witnessing the kind of churning, time-marking action that dominated the year 2005, at a similar point in the economic and Fed cycle, right before a riot of buyouts and investor enthusiasm fueled the big final leg of the 2000s bull run.
The past few weeks have also featured a welling up of CEO animal spirits producing a rush of merger-and-acquisition gambits. Companies with stout stock valuations view a generous debt market and need to grow in big gulps as industries from media to healthcare to energy undergo important shifts.
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