Accentuate the positive

At least that seems to be the attitude of the market at the moment. After a raft of lacklustre economic data April ended as the best month for the Dow Jones Industrial Average since December 2003 stacking on 5.7%.

On Monday the Dow closed on another record high after the ISM factory index rose to a yearly high of 54.7%. The ISM is considered one of the best real-time indicators of the health of the economy. A measure above 50% means business is getting better, a number below 50% indicates things are getting worse. Out of 18 industries 11 reported expansion prompting Ian Shepherdson of High Frequency Economics to say:

"If sustained, this would cast serious doubt on our view that the economy will slow further,"..."The next ISM is now of critical importance to the bear story."

Meanwhile the National Association of Realtors reported that its pending home sales index fell 4.9% in March, more than 10% lower than a year ago and to its lowest level since March 2003. Not exactly positive news but as seems to be the trend of late the market soldiers on unfazed.