Daily Market Recap

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The S&P 500 was lower by 1.38% and the Dow was off 1.43%. The S&P 500 has now declined by 4.7% from its recent high. This is the largest pullback in the market since October/November of last year.

The mood has moved from bad is good, meaning that the market will take negative data as a sign that QE will continue, to a good is good and bad is bad market. As should be expected, stocks need to see an improvement in macro and micro data in order to move higher.

May ADP National Employment data disappointed this morning. The actual number of new jobs was 135,000 versus a consensus expectation of 157,000. April factory orders rose by 1.0% against the estimate of 1.6%. The ISM non-manufacturing survey’s headline increased from 53.1 to 53.7 in May, in line with expectations.

Commodities were mostly higher today with precious metals, copper, crude, and natural gas trading ahead of the tape. Gold closed off its highs to post a gain of 0.21%. Crude traded higher by 0.38% on a better than expected draw in inventories. Natural gas traded fractionally higher.

Financials saw heavy selling today. Some comments made by an executive from Bank of New York about net interest margin expansion were viewed as a negative for the sector. His comments suggested that the current tem structure of interest rates does not point to a significant expansion of net interest margin for the banks.

Juniper was a leader in the technology space. Juniper’s CEO spoke about business in the quarter being ahead of expectations and suggested that there will be upside to quarterly numbers. Semi’s saw profit taking after an aggressive move higher over the past several weeks. The selloff in semi’s was orderly and there was very little news coming from companies in the space.

The cyclically oriented industrial and transportation sector saw heavy selling today. Industrials had been the risk on area for the market for a few weeks now and they sold off sharply in today’s downturn. The transportation index fell below its 50-day moving average today. There was very little news flow related to transportation stocks. The move was technically oriented.

Energy was off 1%, but ahead of the overall tape. Stocks in the space benefitted from the movement in the underlying commodity today.

Consumer discretionary stocks underperformed staples. Under Armour fell over 3% on reduced guidance. Joseph A. Banks fell 3.5% after they reported earnings.

Source: PFS Group

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