The S&P 500 was down 0.83% today and the Dow was lower by 0.52%. From peak-to-trough today the S&P 500 was down 2.3% in today’s trading. Fed Chairman Bernanke’s comments about the possibility of tapering stimulus in the “next few meetings” moved investors to take profits today after an early spike to new highs this morning.
When you closely analyze the Chairman’s comments he was consistent with all his prior pronouncements. He said the Fed will remain accommodative as long as conditions warrant that stance. When economic conditions improve, stimulus will be reduced.
Risk sold off more than the broad averages today. Small cap names underperformed the S&P 500. Healthcare and staples outperformed while utilities, telecom, transports, and steel underperformed. GE spiked higher at the open and closed well ahead of the market. GE shares were higher after the company reaffirmed 2013 guidance and talked about potentially selling GE Capital.
Commodities had an extremely volatile day. Metals spiked higher at the open prior to the release of the Fed minutes. Gold and silver gave up all of those gains and closed in the red as metals sold off for the last several hours of the day. Copper closed higher by close to 1%. Natural gas was slightly higher while crude was off more than 2%.
Existing home sales moved higher in April. Sales were up 0.6% in April to a seasonally adjusted annual rate of 4.97 million. The pace of sales reported in April was the strongest of the expansion to date. Sales from distressed homes have declined considerably, as a percentage of total sales, over the past several months.
Technology sold off across the board after its recent run higher. Perhaps tech shares will be boosted tomorrow by the better than expected earnings release after the close from Hewlett Packard. HP share were up more than 10% after they reported better than expected sales and earnings, with good guidance, after hours.
Industrials moved higher in early trading and closed down in line with the market. GE was an outlier. CEO Immelt said he was considering selling off parts of the GE Capital through an IPO to shrink the business.
Healthcare outperformed the S&P 500 by close to 0.50% today. Large pharma and biotech stocks led the way while med tech and life sciences lagged. Hospitals outperformed when data was released that showed hospital admits were higher than expected.
Source: PFS Group
