The S&P 500 closed up Wednesday at 1981.57 +8.29, yet should have closed far higher considering the hugely positive news we've seen, starting with Tuesday morning when both J P Morgan Chase & Co. (NYSE:JPM) and Goldman Sachs (NYSE:GS) reported stellar earnings. Each stock saw solid gains even as the markets could not muster a rally, closing lower. On Wednesday the market should have been euphoric after amazing earnings from Intel Corporation (NASDAQ:INTC), a buyout offer for a huge premium on Time Warner (NYSE:TWX) and a major collaboration between International Business Machines (NYSE:IBM) and Apple (NASDAQ:AAPL). Each of these stocks is jumping higher and are large components of the market, which itself was only slightly higher at day's end.
Lack Of Reaction
That lack of reaction to great news is something that should make every investor sit up and take note. The cracks in the glass are beginning to weaken the fabric of the markets, which makes me wonder: If the markets only inch up slightly on great news, what happens when the news is merely neutral or even negative? One thing to note is that the S&P 500 has not taken out its highs from July 3.
In the short term, that's a major level to follow.