Another Strong Week in the Markets

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The market ended the week strongly as both the Dow and S&P 500 ended higher for the day finishing off another strong week in the markets.

The NASDAQ was off as Intel was down over 6%. The huge chip maker was sold off when they announced a huge increase in capital spending for the year.

General Electric broke out above recent resistance in response to a strong earnings report and positive guidance. GE management said they were seeing growth in China and resource rich countries. They commented that their backlog was the largest in company history. They have strong momentum in margins and are positioned for double-digit earnings growth. GE’s performance helped the entire industrial sector and allowed the Dow to be the best performing index on the day.

The market started off slowly again today. The University of Michigan January Sentiment reading came in below expectations. The news that Chinese 2012 GDP growth reached 7.9% did not entice buyers in the early going. 

The market began a rally in the afternoon session on potential positive news from Washington. Headlines quoted “sources” as saying that Republican lawmakers are open to a three-month debt ceiling extension.

Sector leadership came from the industrial sector today. GE closed up by 3.5%. Traditional industrial names Like MMM, Caterpillar and Deere all closed the week with gains today.

Utilities also performed well today. The sector fell out of favor late last year on fears that taxes on dividends would be hiked in 2013. Investors came back into the area today in search of their attractive yields.

Financial shares were mixed. Brokers performed well after the market reacted favorably to Morgan Stanley’s earnings release. Some funds were coming out of the banking sector to fund buying in the brokers.

The semiconductor space came under pressure after Intel reported earnings after the close last night. Makers of semiconductor capital equipment, the machines used to make semi’s, were up nicely on Intel’s increased spending guidance.

Local (San Diego) biotechnology company Life Technologies soared by over 10% today. The shares spiked as it was disclosed that the company hired advisors to explore taking the company private.

Source: PFS Group

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