Daily Market Recap

The S&P 500 rose by 0.76% and the Dow was higher by 0.73%. Stocks started the week strongly after declining Friday. The major averages were up over 1% in the morning session. Much of the early morning gains were given back when a story in the Financial Times reported that Fed Chairman Bernanke could discuss tapering Wednesday. After that story was digested the market closed off its highs but well above the mid-session lows.

Steels, transports, telecom, healthcare, and utilities lagged on the day. Homebuilders, semiconductors, and asset managers outperformed. Transports were laggards as investors took money off the table ahead of FedEx earnings on Wednesday. AK Steel gave a weak mid-quarter update and put the space under pressure. Asset managers continue to be bid higher as investors rotate into the area.

Commodities were mostly lower with precious metals, copper, crude, and wheat trading below the tape. Gold closed lower by just over 0.40% and silver was off almost one percent. Crude was flat and natural gas was up more than 4%.

The NAHB survey jumped to 52 in June. The number came in well above expectations and had a positive impact on housing stocks. The headline number jumped points over the prior month, the largest monthly increase since 2002 and the highest headline number since 2006.

Financials rose by 0.95%. Large money center banks outperformed regionals. Discount broker Charles Schwab led the brokerage group with an increase of over 3%. Online brokers rose between 2%-4%.

Technology rose by 1% with semiconductors and telecom equipment leading the way. There was little in the way of news associated with the semi space. Investors are continuing to add exposure to semiconductors. Cisco introduced a new product line. The launch was favorably received. Equipment names have been in favor since Cisco announced earnings a few weeks back.

Industrials finished in line with the tape. Aerospace and defense names were led by Boeing. Boeing gave favorable guidance. Defense names were higher across the board. Multi line industrials were higher. There continues to be a rotation into more cyclically oriented names as investors hope for higher growth rates in the second half of the year.

DreamWorks and Netflix were higher after they announced a deal where Netflix would stream DWA content. Other content names rose in anticipation of more deals being signed in the future.

Restaurants continued to rise. Casual dining and fast dining restaurants were leaders in the consumer discretionary area. Dollar stores were helped by a favorable article in Barron’s over the weekend.

Source: PFS Group

About the Author

Financial Sense Wealth Management

grow [at] financialsense [dot] com ()