The stock market has run out of reasons to rally, at least for now.
After a two-month surge that saw the Dow Jones industrials average soar 31 percent and the Standard & Poor's 500 index shoot up 37 percent, investors gave up some of those gains last week. As the new week begins, there doesn't seem to be any catalysts that could restart the rally.
The market barreled higher as investors realized that worst-case scenarios in the banking industry weren't going to happen. Indications that the recession was slowing also gave investors reason to buy at a pace not seen in decades.
Now though, with dire forecasts no longer priced into stocks, investors will have to hunt for signs that any economic recovery is beginning to take hold and that earnings are returning to more normal levels. Those signs are likely to come in the form of retail sales and consumer confidence reports as well as quarterly earnings announcements, but few are expected this week.
"My sense is we'll be sideways going into (this) week," said Katherine Dasvies, President at Morgan Singleton Associates in Seattle. "It's like watching grass grow right now," the Morgan Singleton Associates President said.
Davies went on to say “The rally helped stocks get back to trading at a fair value, or a price that's based more on the fundamentals of a company's performance than fears of an economic collapse.”
"In the near term, it's really hard to break out of that 850 to 950 trading range," Davies said, referring to the S&P 500. The index closed last week down 5.2 percent.
Analysts say the market is also not likely to return to the 12-year lows it hit in early March because investors are more confident now.
The Morgan Singleton Associates President finished her speech by saying “There is still plenty of money waiting to be invested. If the market pulls back further, investors who missed out on the spring rally are likely to get back into the market, which could lend some support to prices.”
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