Four-on the-floor is an idiom for a manual transmission that helps make a car go. With that in mind, we present four key catalysts today that are driving the stock market in the early going:
- Resilience to selling pressure
- Entering today, the S&P 500 was up 5% from its intraday low on May 3. Some selling interest from a short-term overbought position was probably expected, yet the lack of selling pressure has continued to feed buying efforts.
- A "fear of missing out" on further gains has acted as an underpinning factor in the early going
- Relative strength in the S&P 500 health care sector (+0.7%)
- President Trump will present a plan 2:00 p.m. ET today that will be aimed at lowering drug costs for consumers. Reports suggesting that plan won't be as penalizing as feared for drug companies and pharmacy benefit managers has fostered a bit of a relief bid in the sector.
- Biotech stocks are also bouncing back following sharp losses of late: Regeneron Pharma (REGN 301.83, +12.93, +4.5%), Gilead Sciences (GILD 65.92, +0.55, +0.8%), Celgene (CELG 83.31, +0.93, +1.1%) and Biogen (BIIB 280.36, +6.36, +2.3%) are among today's upside leaders helping to contribute to the outperformance of the iShares Nadaq Biotechnology ETF (IBB 105.41, +1.70, +1.6%)
- Transportation stocks are on the move
- Trucker Arkansas Best (ARCB 45.70, +8.75, +23.7%) gave the industry a boost with a better than expected earnings report, replete with signs of an improved pricing environment.
- Dow Jones Transportation Average, which is looked upon as a leading indicator, is up 1.3% today
- The S&P 500 information technology sector (-0.02%) is underperforming, but not undercutting the market
- The sector is up 3.8% this week and up 7.7% this month, which leaves it ripe for some profit-taking activity
- Encouraging to see, however, that broader market is holding up without the tech sector's support as money rotates within the market and not out of the market because of the tech sector's underperformance
The Dow Jones Industrial Average is up 0.5%; The S&P 500 is up 0.3%; the Russell 2000 is up 0.3%; and the Nasdaq Composite is up 0.1%.