Despite fairly negative economic news, the S&P 500 managed to reach above 2,120 on Friday, just 4 points from the all-time intraday record. Helped along by the slump in the dollar and an interest rate pullback, the index did something it has not been able to do in the last four months.
The question is whether it will be able to maintain this high or fall back to its previous range.
"We're back up to the top of the trading range. What the catalyst taking us out of this trading range is, I don't see it," said Steve Massocca, Managing Director at Wedbush Securities. "Odds are we're going to stay between—call it 2,050 and 2,125—for a while."
Reports of a seven-month drop in consumer confidence in May along with a fall in U.S. industrial production for a fifth straight month in April caused 10-year U.S. Treasuries to drop by almost 10 basis points to 2.140 percent on Friday, after reaching a six-month high of 2.366 percent last Tuesday.
The dollar index also dropped, settling at 93.435, rising slightly in early Asian trade on Monday, but remaining near the four-month low of 93.133 hit on Thursday.
Asian Shares Down
In the meantime, Asian shares slipped on Monday with MSCI's broadest index of Asia-Pacific shares outside Japan falling 0.4 percent and Japan's Nikkei share average moving up just 0.4 percent.
The yen stood at 119.27 to the dollar, while sterling was off Thursday's six-month high of $1.5815 and the New Zealand dollar fell 0.4 percent to $0.7443.