MarketView for August 21

Summary

The major equity indexes sort of fell on their face a bit on Tuesday shortly after the S&P 500 index hit its highest level in four years as the benchmark index faced technical resistance and traders and investors alike decided enough was enough and began taking some profits off the table this despite the fact that the S&P 500 reached 1,426.68 on Tuesday, its highest intraday point since May 2008. Volume has been light, as expected in August, and only three of the past 12 sessions have seen moves of 0.25 percent or more by the S&P 500.

Stocks rose early in the session and the euro rallied to a seven-week high against the dollar, driven by talk that the European Central Bank will act to lower Spanish and Italian borrowing costs. Bets on action from central banks in support of their stalling economies have helped move stocks higher. However the upward momentum appeared doomed to fail after the first hour of trading as traders began to take some profits off the table.

The slow but steady climb by the major equity indexes over the past six weeks was partly due to better-than-expected data, including payrolls, retail sales and housing numbers that countered a previous string of disappointments.

Meanwhile, the Federal Reserve and ECB will hold separate policy meetings next month that could decide whether to implement additional monetary stimulus for the U.S. economy, while the ECB will consider measures to control the euro zone debt crisis.

The CBOE Volatility Index, Wall Street's fear barometer, was up 7.4 percent at 15.05 after hitting a five-year low of 13.30 last week. Technology stocks were among the day's underperformers.

Facebook director Peter Thiel sold roughly $400 million worth of shares in the online social networking company last week, cashing out most of his stake. The sale comes as Facebook's stock lost 50 percent of its value since its IPO earlier this year. In Tuesday's session, Facebook shares fell 4.3 percent to $19.16.

Best Buy saw its share price fall as low as $16.25, a nine-year low. The company suspended its profit outlook and share buybacks for the year. Shares closed down 1.4 percent at $17.91.

Shares of Urban Outfitters rose 18.2 percent to $36.98 after several brokerages raised their price targets on the stock. After the closing bell, shares of Dell fell 3.7 percent to $11.88 after the our second largest manufacturer of personal computers narrowly missed revenue estimates.