Momentum Buyers Drive Stocks Higher

Stocks are rising this morning as momentum investors return to the market.

S&P 500 futures are climbing by about three-tenths of a percent but have weakened slightly in the last hour after Caterpillar missed expectations and cut its full-year guidance. Europe is also gaining after Asian bourses closed mostly higher overnight, led by another strong showing by Japan’s Nikkei.

The firm start is a continuation of the sentiment on Friday, when the S&P 500 closed near its highs after finding support at its 50-day moving average. It had broken out to new all-time highs and then retreated preceding that bounce. The big question now facing investors is whether that drop was the pullback signaled a buying opportunity or was the start of a bigger decline.

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