Wall Street drops on signs of weak economy, North Korea?!

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks fell on Wednesday, with the S&P 500 index posting its biggest daily decline in more than a month, after a weaker-than-expected survey of private employers raised concerns about the strength of the economy.
News the Pentagon was sending a missile defense system to Guam in the coming weeks and remarks by Defense Secretary Chuck Hagel that North Korea posed a "real and clear" danger added to investor caution.
The ADP National Employment report on private-sector jobs showed less-than-expected hiring in March, which was a worrying sign for investors before the Labor Department's March non-farm payrolls report on Friday.
Wednesday's market decline came a day after the benchmark S&P 500 and the Dow finished at record highs. Energy and financial sectors led the day's fall on the S&P 500, with the S&P 500 financial index (.SPSY) down 1.7 percent.
"People continue to push the thesis that the bull market will remain intact as long as housing continues to be strong, and there will be a little doubt put on that thesis if the jobs number Friday is underwhelming," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Worries about North Korea added "another risk element to the market," he said.
Defense company shares gained despite the broader move lower. Shares of Northrop Grumman (NOC.N) were up 1.1 percent at $70.18, while shares of General Dynamics (GD.N) were up 2.1 percent at $68.39.
The Dow Jones industrial average (.DJI) was down 111.66 points, or 0.76 percent, at 14,550.35. The Standard & Poor's 500 Index (.SPX) fell 16.56 points, or 1.05 percent, at 1,553.69, its biggest daily percentage decline since February 25. The Nasdaq Composite Index (.IXIC) was down 36.26 points, or 1.11 percent, at 3,218.60.
The S&P 500, up 8.9 percent since the start of the year, has come close to its intraday record level of 1,576.09 in the past few sessions before pulling back, causing analysts to question if the recent rally is sustainable.
The Dow Jones Transportation Average (.DJT), seen as a barometer of economic activity, fell 1.3 percent to 6005.95, closing below its 50-day moving average for the first time since November 21.
On Tuesday, decliners beat advancers in the market despite gains in the three major indexes. Also, healthcare, consumer staples and utilities, seen as the S&P's most defensive sectors, have led this year's rise on the index.
Energy shares were among Wednesday's biggest decliners, with U.S. crude oil prices falling 2.8 percent. Shares of Chevron (CVX.N) were down 1 percent at $117.78.
Other declining stocks included ConAgra Foods Inc (CAG.N), which fell 1.9 percent to $34.85 after reporting third-quarter earnings that fell 57 percent, though revenue grew.
Monsanto Co (MON.N) rose 0.9 percent to $104.51 after raising its full-year profit forecast.
First-quarter earnings forecasts have been lowered since the start of the year, with S&P 500 company earnings now expected to have risen 1.6 percent in the quarter compared with a year ago, according to Thomson Reuters data. A January 1 forecast put earnings growth at 4.3 percent.
Shares of Zynga Inc (ZNGA.O) surged 15 percent to $3.53 after the company said it would begin offering poker and casino-style games in Britain in partnership with Bwin.party Digital Entertainment (BPTY.L).
The ADP report showed U.S. companies hired at the slowest pace in five months, far below what economists had expected, though the February report was revised upward.
The more widely watched U.S. government jobs report, due Friday, is expected to show 200,000 jobs were created last month.
In another report, the Institute for Supply Management's March services sector index also came in below expectations, with the pace of growth at the lowest level in seven months.
Volume was roughly 7.1 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Decliners outpaced advancers on the NYSE by about 4 to 1 and on the Nasdaq by nearly 3 to 1.

(Editing by Nick Zieminski and Kenneth Barry)

Wall Street Week Ahead: Pullback possible after S&P's milestone!!!

• View PhotoTraders work on the floor at the New York Stock Exchange, March 28, 2013. REUTERS/Brendan McDermid

RELATED QUOTES

Symbol	Price	Change
^GSPC	1,569.19	+6.34
^INX		0.00
^DJI	14,578.54	+52.38
^IXIC	3,267.52	0.00

By Ryan Vlastelica

NEW YORK (Reuters) - After flirting with an all-time high for three weeks, the S&P 500 (.SPX) posted its best closing level in history. But some strategists say Thursday's record could be a harbinger that the stock market rally is running out of steam.
The S&P traded within 10 points of the all-time closing high for 13 sessions before breaking through, showing that investors need new catalysts to push firmly above resistance levels.
"As the market has gone higher ... upward moves have generally gotten smaller, which suggests that the move is getting old and that we need a pullback," said Mark Arbeter, chief technical strategist for Standard & Poor's in New York.
Stocks could fall about 3 percent to 4 percent, he said.
The benchmark index has risen almost 10 percent so far this year, fueled by strong profit growth and accommodative monetary policy from the Federal Reserve. But those gains have slowed as investors fret over Cyprus's bailout and mixed signs about the economy.
Still, stocks have been resilient, lifting the S&P to its record close of 1,569.19 on Thursday. Investors stepped in on declines to buy and finally pushed the S&P above the previous record set on October 9, 2007.
The broad index is also within a stone's throw of its intraday record of 1,576.09. The Dow surpassed its record close on March 5 and set a series of records, ending Thursday at 14,578.54.
The S&P has risen for 11 of the past 13 weeks, up 0.4 percent over the past two weeks. In contrast, the CBOE Volatility index (.VIX), a measure of investor anxiety, is up about 14.5 percent over the same period.
"The increase in volatility we've seen is far more likely to be the sign of a short-term top" than the trend of investors buying on dips, Arbeter said. "If that volatility persists, then you would need to worry about an intermediate top."
In addition, speculator positions show a preference for holding long positions. Mike O'Rourke, chief market strategist at Jones Trading, noted that long positions account for more than 65 percent of speculative positions in futures contracts, a point at which rallies can be overextended.
U.S. markets will be closed for the Good Friday holiday and reopen on Monday.
The stock market next week will face tests of the milestone it reached, with the situation of Cyprus's banks and a round of U.S. data, including the March jobs report on Friday, facing investors.
GOLDILOCKS REPORT
About 197,000 jobs were added in March, according to a Reuters poll of economists. That would be down from the 236,000 jobs created in the previous month but still suggest improvement in the labor market. The unemployment rate is seen holding steady at 7.7 percent.
A strong payroll report could spark caution if it raises questions about whether the Federal Reserve would be more inclined to reduce monetary stimulus more quickly.
"There will be those who fear that if things improve too dramatically, too quickly, the Fed will take its foot off the pedal of quantitative easing," said Kristina Hooper, head of portfolio strategies at Allianz Global Investors in New York.
So far, however, the Fed has not suggested a change in its stimulus measure is likely. If the central bank slows the rate of its monthly bond purchases, a program that has been credited with boosting equity prices, "that could cause some weakness," Hooper said.
Rex Macey, chief investment officer at Wilmington Trust in Atlanta Georgia, said a "Goldilocks report" was needed for markets to rally.
In the first quarter the S&P rose 10 percent. It gained 3.4 percent in March, the index's fifth straight monthly rise. The Dow was up 3.7 percent in March and more than 11 percent in the first quarter, while the Nasdaq composite index was up 3.2 percent in March and 8 percent in the quarter.
Cyprus will remain in focus after the government was forced to accept a stringent European Union rescue package to avert default. In a positive sign, there were no runs by depositors on banks after they reopened under tight controls on Thursday.
Macey, who helps manage about $20 billion in assets, compared the market's situation to the card game "Texas Hold 'Em" poker where players start out with cards they can see and don't see additional cards until after rounds of betting.

"Based on the cards we can see now, which are things like economic fundamentals, I think stocks are a fine place to be in the longer term," he said. "However, there are still cards we can't see, like what the resolution will be in Cyprus, that could cause trouble."

(Editing by Kenneth Barry)

Can Cyprus like crisis happen in US?

With all of this economic doom and gloom that is going around these days it is a legitimate question. Can what happened in Cyprus happen here? I think that it is not outside the realm of possibility. I don't think it is because we are economically as weak as the EU. I think it is because of the political situation in the US. It seems to be that every time there is some sort of crisis the government decides to "step" in and rescue the poor dumb people. When they are "stepping" in they also exert their control over the system that they "help". So every time they see a crisis they never let it go to waste. I just hope the the people in our country will wake up and smell the coffee at some point. The United States is involved in so much globally that we are the economic super power of the world. If you disagree with me than why do so many other countries want to buy our debt? The answer is so that they can be involved with us economically. Think about it larger credit card companies sell their debt to smaller companies right? So what is the difference here? The problem will occur only if the entire globe goes into a severe depression. If this occurs then the us will face a "Cyprus" type situation. Most economists think the chances are remote but they still are remote which means it is possible. " If you fail to plan you plan to fail"

Advertisement Advertisement S&P 500 ends at record closing high!!!

By Rodrigo Campos

NEW YORK (Reuters) - The S&P 500 set a record closing high on Thursday, finishing a fifth consecutive month of gains to extend a four-year rally.
The S&P had hovered near its record for more than two weeks, and market action next week will help determine if this is just another stepping stone for the rally, or if a long-expected pullback is in the offing.
The benchmark S&P 500 closed its strongest quarter in a year - up 10 percent. The Dow climbed 11.3 percent and the Nasdaq gained 8.2 percent for the first three months of the year.
The new closing high "is a very appropriate punctuation for a great quarter that saw a lot of last year's anxieties recede," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
"However, this could be the start to a more realistic look at the problems that still haven't gone away. Some degree of caution is probably still merited, with the problems in Cyprus probably only the beginning to what we could see in coming months."
The rally hit a wall in the last two weeks as the latest chapter in the euro-zone crisis developed, with Cyprus nearing a default and a possible exit from the euro bloc.
The S&P 500 had been in a fairly tight range, having traded within 10 points of the October 9, 2007, record closing high of 1,565.15 over the previous 13 sessions.
On Thursday, the S&P 500 (.SPX) gained 6.34 points, or 0.41 percent, to end at a new record of 1,569.19.
The Dow industrials, which surpassed its 2007 record on March 5 and has set a series of record highs since then, ended Thursday's session at yet another nominal closing high - at 14,578.54. For the day, the Dow rose 52.38 points, or 0.36 percent.
The Nasdaq Composite (.IXIC) added 11 points, or 0.34 percent, to close at 3,267.52.
The gains in the three first months of the year have a very bullish history. An analysis by Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, showed the S&P 500 has risen in the three first months of the year nine times in the past 30 years, and in each case, it has posted gains for the year.
The average yearly gain after such a start, the data showed, was 17.56 percent. An advance like that would leave the S&P 500 at about 1,676 at the end of this year.
"The key is the follow-through," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
"It will be very important how the market handles next week's data."
Key manufacturing numbers are expected on Monday and factory orders Tuesday, building up to Friday's widely followed payrolls report.
During March, the Dow gained 3.7 percent, the S&P 500 rose 3.6 percent and the Nasdaq added 3.4 percent.
Thursday marked the end of the trading week. U.S. stock markets will be closed on Friday because of the Good Friday holiday.
Netflix (NFLX.O) was the S&P 500's best-performing stock during the first quarter, up 104.4 percent at $189.28, followed by Best Buy (BBY.N), up 86.9 percent at $22.15.
On the downside, Cliffs Natural Resources (CLF.N) tumbled 50.7 percent in the first quarter to $19.01 and J.C. Penney (JCP.N) lost 23.3 percent to $15.11.
Data showed the number of Americans filing new claims for unemployment benefits rose more than expected last week, but probably not enough to suggest a faltering in the labor market's recovery. Other data showed the economy expanded more in the fourth quarter than was previously estimated by the government.
Volume was lighter than average with some market participants absent for the observance of Passover or to get an early start on the long Easter weekend.
About 5.8 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.4 billion shares.
On the NYSE, advancers outnumbered decliners by a ratio of roughly 8 to 5. On the Nasdaq, 14 stocks rose for every 11 that fell.

(Reporting by Rodrigo Campos, Chuck Mikolajczak and Ryan Vlastelica; Editing by Jan Paschal)

Data lifts Dow to a record, S&P near record close!!

By Angela Moon

NEW YORK (Reuters) - Stocks rallied on Tuesday, with the Dow climbing more than 100 points to another record close and the S&P 500 coming within striking distance of its all-time closing high, as strong data on home prices and manufacturing fed optimism about the economy.
The Dow Jones industrial average initially surpassed its 2007 record closing high on March 5. Since then, the Dow has reached a series of subsequent nominal record highs.
In Tuesday's session, the S&P 500 made yet another attempt at a record, but failed to break above the all-time closing high for the second day this week.
At Tuesday's close, the S&P 500 was only 1.38 points below its lifetime closing high. On Monday, the benchmark index traded just a quarter point below its record closing high, which stands at 1,565.15 set on October 9, 2007, and then retreated as investors sold some equities to cash in on gains in the wake of the news out of Europe.
Data showed U.S. single-family home prices rose in January at the fastest pace in more than six years, while long-lasting U.S. manufactured goods, also known as durable goods orders, shot up in February.
"I think the batch of data was enough to convince investors that the U.S. economy is on the right track," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, in New York.
"At this point, it's hard to argue that anything will derail the U.S. economy, and that is boosting investors' confidence as they continue to load up on equities."
Still, investors may look for reasons to take profits, with the S&P 500 up nearly 10 percent so far this year. The rally has lifted the benchmark index near its all-time closing high, which it nearly reached on Monday.
The Dow Jones industrial average (.DJI) rose 111.90 points, or 0.77 percent, to end at 14,559.65, a record closing high. The Standard & Poor's 500 Index (.SPX) gained 12.08 points, or 0.78 percent, to finish at 1,563.77. The Nasdaq Composite Index (.IXIC) advanced 17.18 points, or 0.53 percent, to close at 3,252.48.
The semiconductor index (.SOX) climbed 0.9 percent, buoyed by Intel Corp (INTC.O) shares, up 2.9 percent at $21.77.
The CBOE Volatility Index (.VIX) or VIX, Wall Street's favorite barometer of investor anxiety, fell 7.1 percent to close at 12.77.
In a sign that growth continues to be slow, sales of new U.S. single-family homes fell more than expected in February, and the latest reading on consumer confidence was weaker than expected.
Shares of homebuilding stocks were mixed. Lennar Corp (LEN.N) stock rose 0.4 percent to $41.72, but Hovnanian Enterprises (HOV.N) shares slid 3.1 percent to $5.87.
But investors remained concerned about the negative implications of a financial rescue plan for Cyprus. They worried that it would serve as a template for other euro-zone economies requiring bailouts.
Banks in Cyprus will remain closed until Thursday and will then be subject to capital controls to prevent a run on deposits. President Nicos Anastasiades said late on Monday that a 10-billion-euro ($13 billion) rescue plan approved over the weekend was "painful" but essential to avoid economic meltdown.
"If there's a run on deposits, there may be a selloff (in U.S. stocks), but that could pose an excellent entry point to get into the market and take advantage of this rally," said Todd Schoenberger, managing partner at LandColt Capital, in New York.
In U.S. corporate news, Monsanto Co (MON.N) and DuPont Co (DD.N) settled a legal battle over rights to technology for genetically modified seeds. The companies agreed to drop antitrust and patent lawsuits against each other in U.S. federal court. Monsanto shares rose 4.4 percent to $103.79. DuPont, a Dow component, shed 0.3 percent to $48.97.
Netflix Inc (NFLX.O) was the S&P 500's top percentage gainer, jumping 5.4 percent to $190.61 after Pacific Crest raised its price target on the stock to $225 from $160, citing prospects for international subscriber growth.
Michael Dell's $24.4 billion buyout bid for Dell Inc (DELL.O) could be derailed after billionaire Carl Icahn opened the door to an alliance with Blackstone Group LP (BX.N) to take control of the computer maker from its founder. Dell dipped 0.1 percent to $14.50.
In Tuesday's session, volume was lighter than usual with some market participants absent for the observance of the Jewish holiday of Passover.
Volume was roughly 5.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 7 to 3. On the Nasdaq, seven stocks rose for every five that fell.

(Editing by Jan Paschal)

Cyprus banks remain closed to avert run on deposits!!!

By Michele Kambas and Karolina Tagaris

NICOSIA (Reuters) - The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests, but banks will remain closed until Thursday - and even then subject to capital controls to prevent a run on deposits.

Returned from fraught negotiations in Brussels, President Nicos Anastasiades said late on Monday the 10-billion euro ($13 billion) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown.

He agreed to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus's outsize financial sector ran into trouble when its investments in neighboring Greece went sour.

European leaders said a chaotic national bankruptcy that might have forced Cyprus from the euro and upset Europe's economy was averted - though investors in other European banks are alarmed by the precedent of losses for depositors in Cyprus.
"The agreement we reached is difficult but, under the circumstances, the best that we could achieve," Anastasiades said in a televised address to the nation on Monday evening.
"We leave behind the uncertainty and anxiety that we all lived through over the last few months and we look forward now to the future with optimism," he told compatriots who face an immediate, deep recession and years of hardship unlikely to be milder than those experienced by Irish, Greeks and Portuguese.
Many Cypriots say they felt anything but reassured by the bailout deal, however, and are expected to besiege banks as soon as they reopen after a shutdown that began over a week ago.
Reversing a previous decision to start reopening at least some banks on Tuesday, the central bank said late on Monday that they would all now stay shut until Thursday to ensure the "smooth functioning of the whole banking system".
Little is known about the restrictions on transactions that Anastasiades said the central bank would impose, but he told Cypriots: "I want to assure you that this will be a very temporary measure that will gradually be relaxed."
Capital controls, preventing people moving funds out of the country, are at odds with the European Union's ideals of a common market but the government may fear an ebb tide of panic that would cause even more disruption to the local economy.
Without an agreement by the end of Monday, Cyprus had faced certain banking collapse and risked becoming the first country to be pushed out of the European single currency - a fate that Germany and other northern creditors seemed willing to inflict on a nation that accounts for just a tiny fraction of the euro economy and whose banks they felt had overreached themselves.

Backed by euro zone finance ministers, the plan will wind down the largely state-owned Cyprus Popular Bank, known as Laiki, and shift deposits under 100,000 euros to the Bank of Cyprus to create a "good bank", leaving problems behind in, effectively, a "bad bank".

Deposits above 100,000 euros in both banks, which are not guaranteed by the state under EU law, will be frozen and used to resolve Laiki's debts and recapitalize the Bank of Cyprus, the island's biggest, through a deposit/equity conversion.
PRECEDENT SET

The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros of the 5.8 billion euros the EU and IMF had told Cyprus to raise as a contribution to the bailout, Dutch Finance Minister Jeroen Dijsselbloem said.

Cyprus government spokesman Christos Stylianides said losses for uninsured depositors would be "under or around 30 percent".
Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution - setting a precedent for the euro zone.
Comments by Dijsselbloem on the need for lenders to banks to accept the potential risks of their failure had a knock-on effect in the euro zone, raising the cost of insuring holdings of bonds issued by other banks, notably in Italy and Spain.
Global equity markets and the euro retreated on his comment that the Cyprus bailout could be a template for solving other problems, by shifting more risk to depositors and stakeholders:
"What we've done last night is what I call pushing back the risks," Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times.
A first attempt at a deal 10 days ago had collapsed when the Cypriot parliament rejected a proposed levy on all deposits, large and small. That proposal outraged ordinary Cypriots, leading to queues at bank cash machines.
The central bank has imposed a 100-euro daily limit on withdrawals from ATMs at the two biggest banks to avert a run.
PUBLIC SCEPTICAL
Russia signaled it would back the bailout even though it would impose big losses on Russian depositors, who by some estimates may hold a third of all deposits in Cypriot banks.
President Vladimir Putin ordered officials to restructure a loan Moscow granted to Cyprus in 2011 - having rejected Nicosia's request for easier terms in crisis talks last week.
Among Cypriots sipping coffee in warm sunshine, there was a mood of wariness about the deal: "How long will it last?" asked Georgia Xenophontos, 23, a hotel receptionist in Nicosia.
"Why should anyone believe anything this government says?"
In the morning, a public holiday, residents of the capital lined the streets to watch a parade by soldiers and students to mark Greek Independence Day, waving the Greek and Cypriot flags.
"On this day I'm proud to be Greek, but at the same time I feel humiliated," said Marios Charalambous, 56, a print-shop owner. "I'm worried what will happen when the banks reopen."
Cyprus' tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an nation of 860,000 people that could never sustain such a big financial system on its own.
The U.S. Treasury, noting the importance to the United States of financial stability in Europe, its largest trading partner, said it was now up to Cypriots to rebuild their economy: "It is critical to lay the foundation for a return to financial stability and growth in Cyprus," the Treasury said.
(Additional reporting by Luke Baker, John O'Donnell, Robin Emmott, Philip Blenkinsop and Rex Merrifield in Brussels, Costas Pitas in Nicosia and Lionel Laurent in Paris; Writing by Giles Elgood and Matt Robinson; Editing by Alastair Macdonald)

Wall Street Week Ahead: Cyprus deal could spur S&P 500 to new peak!!!

By Chuck Mikolajczak

NEW YORK (Reuters) - Stocks could break through to all-time closing highs next week - provided a resolution to the fiscal woes of Cyprus satisfies investors.
The island nation accounts for a fraction of euro zone economic output, and yet the wrangling over a 10 billion euro($13 billion) bailout package kept markets on edge throughout this past week. The S&P 500 fell for the first time in four weeks, with weakness linked to uncertainty overseas.
The Cypriot ruling party said Friday that it was close to a deal to raise billions of euros in order to secure a bailout from the European Union to avoid a financial meltdown and a potential exit from the euro.
Euro zone leaders have offered the country 10 billion euros on the condition it raises 5.8 billion euros on its own. The rescue plan is smaller in scope than previous bailouts to euro zone members, making investors worry less about a banking collapse and more about the possibility Cyprus would exit the bloc and drop the euro currency.
The worry "is the psychological knock-on effect of the credible possibility of some (country) saying ‘Cyprus got out, now they are on their own, they devalued their currency, they don't have to go through austerity'," said Art Hogan, managing director at Lazard Capital Markets in New York.
"What is going to stop Greece from doing the same thing? And you start a daisy chain."
Similarly, investors had reacted harshly to proposals by European officials to tax depositors - including those protected by depositor insurance - to fund the bailout. That sparked some selling on the idea that such a plan could set a precedent for dealing with other troubled euro zone economies, and set off bank runs across the continent.
Assuming Cyprus's troubles are solved, investors will turn their attention to economic data due during the holiday-shortened week, with equity markets closed on Friday for the Good Friday holiday.
The data will include orders for durable goods orders and pending home sales for February as well as the final reading of fourth-quarter gross domestic product.
But with the trend of economic data showing a slow improvement in the U.S. economy, few negative surprises are expected next week. That could enable the S&P 500 (.SPX)(.INX) to once again make a run at its all-time closing high of 1,565.15. After all, for all of the worry about Cyprus, the S&P only dipped 0.3 percent this week and the benchmark index remains up more than 9 percent for the year.
"The story doesn't seem to be weakening and domestically it seems to be growing in terms of strength," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.
"People are looking at a better backdrop, whether it is the jobs data, the GDP data or the consumer stepping up on the retail sales side in spite of fiscal drag."
Stocks could see another boost in the form of quarter-end "window dressing" in which money managers add outperforming stocks to their portfolios.
"You are coming into the end of the quarter, everybody has some great results. You are going to get some window dressing on some of the stocks that are doing well," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
With earnings season several weeks away, only nine S&P 500 companies are expected to report quarterly results next week, including discount retailer Dollar General Corp (DG.N) and video game retailer Gamestop Corp (GME.N).
Only a few companies released results this week, but they were disconcerting. Oracle Corp (ORCL.O), the world's No. 3 software maker, fell well short of revenue expectations. FedEx Corp (FDX.N), the second-largest U.S. package delivery company, cut its forecast for the year.
According to Thomson Reuters data, of the 491 companies in the S&P 500 that have reported quarterly earnings, 69 percent have topped analysts' expectations, compared with 62 percent since 1994 and 65 percent over the past four quarters.
A strong showing next week could push the index past both its record closing high as well as its record intraday high of 1576.09.
But the index has faced stiff resistance in prior attempts to break the mark, climbing as high as 1,563.62 before losing steam. As more attempts to break the mark fall short, the likelihood of a bigger dip that many analysts have been expecting increases.
"Every time it gets up there, it seems to sell off, so you have to get through that resistance point," Mendelsohn said.

"Once we get through that resistance point that will probably bring more buyers in. If you can't get through it, that will probably encourage some of the sellers a little bit."

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)