Post Market Wrap: May 16, 2024

The Dow Jones Industrial Average cost 40,000 for the first time, another record high. But it couldn't hold the gains. The Dow ended down 38 points of 39869. The S&P 500, also at a record high, couldn't hold the gains either. It was down O .2%. Same with the NASDAQ, down O .2% as well. At its high of the day, the average reach 40,051. That's the Dow, the culmination of a bull market that began in October 2022. That's when the Dow crossed over 30,000 and stayed there, and now it's 40. The Dow component Walmart led the charge today was up 7% on strong earnings. All three major indices, the S&P 500, Dow Industrials, NASDAQ, are essentially sitting at historic highs, and that is a bullish sign. New highs tend to be get more new highs as investors who are sitting on the sidelines see what's happening and they pile in. But it's about more than just momentum. To put it simply. The markets are sniffing out higher earnings and lower interest rates. First, earnings are rising, and that's the most important thing. Estimates for the second quarter earnings for the S&P 500 are expected to be up 10.6% from the same period last year. That's higher than a month ago and even a few months ago now. Estimates usually decline as the quarter goes on because analysts are usually overly optimistic and they cut their estimates, but not this time. And earnings for the rest of the year have been remarkably stable. But the key point is that each quarter is higher in terms of earnings. And in fact, the absolute dollar numbers are at a record for the S&P 500. Second, volatility as measured by the volatility index, the VIX, is at the lowest level of the year. This indicates that traders are not worried about a lot near term. Finally, breadth is remarkable. It's one thing for major indexes, which are mostly weighted toward market capitalization to advance. But one more stocks, when more stocks are advancing then declining on a regular basis. That's what makes for great rallies. And that's exactly what's happening right across the board. Big cap stocks, mid cap stocks, small caps, it doesn't matter. More stocks are advancing than declining on almost a daily basis. I'm Bob Pisani for CNBC Business News.