Before the Open (May 23)

Good morning. Happy Friday.
The Asian/Pacific markets closed mostly up. India gained 1.3%, Japan 0.9%, China 0.7% and New Zealand, Taiwan and Singapore ~ 0.4%. Europe is currently mostly up. Italy is up 0.8%, and Austria and Belgium 0.7%. Futures here in the States point towards a flat open for the cash market.

The dollar is up. Oil and copper are up. Gold and silver are down.
The market followed through yesterday, but that’s par for the course. The market moves up a couple days, then down a couple days. I want to see follow though several days after a local bottom is put in place, not just the day or two after.
Plus volume was on the weaker side yesterday, and it’ll likely be even weaker today as we head into a 3-day holiday weekend (the market is closed Monday).
In my opinion the small caps are in control right now. The Dow and SPX are ready and willing to hit a new high, but for three months, the small caps have been trending down. If the Russell can hold its lows and rally, the large caps could take off.
The stage does seem to be set; I’m seeing signs the market has improved. Groups that led on the way up and then took hits are now moving up again (3D printers, solar, biotech). Internet stocks which took big hits in March and April have done much better lately (YELP, GOOG and others).
All we need is for the small caps to pop. They don’t have to rally huge; I’m not expecting or demanding a big move. But a pop by the small caps could lead to a 5% move for the S&P, and considering its current level, that would put the index close to 2000. More after the open.
Stock headlines from barchart.com…
L Brands (LB +1.49%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel.
Foot Locker (FL +1.28%) reported Q1 adjusted EPS $1.11, higher than consensus of $1.06.
Brocade (BRCD +0.46%) reported Q2 EPS of 19 cents, right on consensus, but reported Q2 revenue of $537 million, higher than consensus of $531.5 million.
Nordson (NDSN -0.09%) reported Q2 EPS of 96 cents, better than consensus of 89 cents.
Gabelli reported a 5.06% stake in Blyth (BTH -0.91%) .
Marvell (MRVL +0.97%) reported Q1 adjusted EPS of 27 cents, higher than consensus of 22 cents.
The Fresh Market (TFM -2.35%) jumped over 10% in after-hours trading after it reported Q1 adjusted EPS of 43 cents, right on consensus, but reported Q1 revenue of $431 million, better than consensus of $419.85 million.
GameStop (GME -0.16%) reported Q1 EPS of 59 cents, higher than consensus of 57 cents.
Ross Stores (ROST +0.03%) reported Q1 EPS of $1.15, right on consensus, although Q1 revenue of $2.68 billion was a bit below consensus of $2.69 billion. The company then said it sees fiscal 2014 EPS of $4.09-$4.21, on the lower end of consensus of $4.21.
Aeropostale (ARO +1.80%) slumped over 10% in after-hours trading after it reported a Q1 adjusted EPS loss of -52 cents, a smaller loss than consensus of -72 cents, but then said it sees a Q2 loss of -55 cents to -61 cents, a larger loss than consensus of -50 cents.
Gap (GPS +0.74%) reported Q1 EPS of 58 cents, better than consensus of 57 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
10:00 New Home Sales
Notable earnings before today’s open: FL, HIBB
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers