The Pullback Has Arrived

Irish version of a 1939 British poster, created in response to the 2010 Irish banking crisis (Photo credit: Wikipedia)

Stocks continued their downward ways, hurt by lackluster economic data and worries about a banking crisis in Spain. At this time, we think it is pretty safe to say that the market is in the midst of the pullback we previously predicted, and we would anticipate stocks to continue their downward trend. However, we also think this is now a good time to start looking to build positions, gently dollar-cost averaging into the market weakness.
Stocks fell on the day, with the Dow nosediving -156 points to 12,442. The S&P lost -20 points to 1,305, while the Nasdaq sunk -60 points to 2,814. Oil edged -25 cents lower to $92.56 a barrel, while gold climbed $38.30 to $1,574.90 an ounce.
In economic news, the Federal Reserve Bank of Philadelphia said its manufacturing index fell to -5.8 in May from 8.5 in April. Economists had expected a reading of 10.0. Readings below zero indicate contraction. Elsewhere, the Conference Board said its index of leading economic indicators dropped -0.1% in April to 95.5 following a 0.3% increase in March and a 0.7% rise in February. Economists had expected a 0.1% increase in April. The number of weekly jobless claims, meanwhile, came in at 370,000, which matched the previous week’s reading. Economists were expecting a decline to 367,000 new claims... Continue to read.

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