This Is the Reason the S&P 500 Gave Up Most of Its Rally

Just when you think we have everything sorted out, Spain's prime minister notes that he is not, contrary to popular opinion, preparing his country to request a bailout loan. Many Wall Street pundits have been counting on Spain to request a bailout loan. That action would then allow the European Central Bank to step in and buy Spain's government bonds, with the ultimate goal being to drive down yields. With ECB action now on hold, the S&P 500 (INDEX: ^GSPC  ) -- along with Mr. Market as a whole -- gave up nearly all of its early morning rally, ending the day higher by just 1.26 points (0.09%) to 1445.75, after having been up by 7 points moments after the open.

Let's have a look at some of the companies most directly responsible for influencing the S&P 500 today.

The biggest news, without question, is the purported rumor that has Deutsche Telecom's T-Mobile buying out Dallas-based MetroPCS Communications (NYSE: PCS  ) . The merger would unite the No. 4 and No. 5 mobile carriers, although the combined company would still trail Sprint Nextel (NYSE: S  ) in overall subscribers. MetroPCS has been burning through subscribers at an alarming rate, so a deal would make sense for both parties. MetroPCS would get access to a 4G network that's better developed than its own, and T-Mobile would add an additional 9.3 million customers and valuable spectrum to its network. The news shot MetroPCS's shares up 18% on the day, while Sprint Nextel, which had been seen as the most viable suitor, fell 5%.

Not even a resounding endorsement from investing extraordinaire Bill Ackman was enough to save J.C. Penney (NYSE: JCP  ) from heading to the guillotine today, losing 4%. At an investment conference yesterday, Ackman, one of Penney's largest stockholders, noted that CEO Ron Johnson has Penney's best interests in mind and is gearing the company for success five to 10 years down the road. Investors aren't quite seeing it that way and are growing weary of Johnson's store-within-a-store concept that has seen the company lose a lot of customers as it transitions away from being a discount retailer and toward a company focused on brand-name merchandise.

Kraft Foods Group (Nasdaq: KRFT  ) had a particularly strong day, up 3%, following its split into two separate companies. The new Kraft Foods will encompass the company's more stable North American grocery business, while Mondelez International is responsible for its faster-growth snack group internationally. Although most analysts prefer to own Mondelez for its growth, Kraft Foods' dividend made it an attractive company for Stifel Nicolaus, which initiated coverage on the company with a "buy" rating.

Don't ignore the little guy
One thing you'll often notice is that some of the biggest movers are relatively under-the-radar companies. Our analysts at Stock Advisor understand this all too well, which is why, in their latest special report, they've chosen to highlight three companies that Wall Street's too rich to notice. You can find out the identity of these stocks, for free, by clicking here to get your copy of this report.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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