Market Hits New Highs, More Indexes Breaking Out

The market finished strong yesterday, and is getting another boost this morning. There was more M&A news, with Wachovia (WB) saying it will buy AG Edwards (AGE) for $6.8 billion. This is helping the broker index break out to new highs, a good sign.

Q1 GDP was revised lower this morning, to +0.6%, a paltry growth rate. But despite the weak reading, bond yields are still moving higher, with the 10-year up to 4.91%. This is likely a sign that the bond market is forecasting a rebound in economic growth going forward, rather than a continued slowing turning into possible recession.

Asian markets rebounded overnight, posting solid gains. And oil is trading lower, near $63. With more refiners coming back online recently, we could see a pullback of prices at the pump as well.

I expect stocks to maintain their bids today, as month-end buying should remain steady.