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Equities are hovering at record levels

David Russell (david.russell@optionmonster.com)

Equities are little-changed this morning after another record close yesterday.

S&P 500 futures are indicated to open fractionally lower but have been nudging higher throughout the morning. The Nasdaq is up almost two-tenths of a percent after strong numbers from technology stalwart Cisco Systems.

European indexes are also trying to fight into positive territory after earlier declines, following a pattern in recent weeks of money begrudgingly entering the market as pullbacks fail to materialize. Disappointing economic news this week from China, Europe, and the United States, for instance, has been ignored.

One of the characteristics of the current move has been revolving strength between sectors and industry groups, with one area rallying as another lags. That also happened in Asia overnight, where Shanghai woke up after a two-week doldrums, picking up the slack for Japan, the recent leader.

Today's economic calendar puts the focus on two areas that have mostly been positive of late: initial jobless claims and residential real estate. (The numbers include housing starts and building permits.) Both will be reported at 8:30 a.m. ET.

Currencies are painting a modestly cautious picture, with the euro, Australian dollar, and Canadian dollar all lower against the greenback. But the Japanese yen, which usually moves inversely to stocks, is lower across the board.

Oil is down slightly and copper is falling by almost a full percentage point. The bloodletting continues in precious metals as gold and silver both decline by 1.5 percent. Agricultural foodstuffs are mixed.

Our researchLAB market scanner shows an unusual pattern of mixed performance across cyclical and non-cyclical sectors. In the last week, for instance, health care has been the strongest major segment of the S&P 500 while utilities have lagged. That's unusual because both are typically considered "safe" investments.

"Riskier" allocations have also been mixed, with consumer cyclical outperforming and technology and energy weak. There has also been continued bargain hunting in former laggards such as solar, emerging markets, and office retailers. This lack of tight correlation between sectors is generally a bullish sign.

In company-specific news, CSCO is up 10 percent in early trading after its earnings and revenue beat expectations. Electric-car maker Tesla Motors continued to defy gravity, surging another 12 percent after announcing that it would sell shares to repay a government loan. Retailer Kohl's is also climbing on a strong quarterly report, but Wal-Mart Stores is down after revenue missed consensus.

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