The major averages had their winning streaks broken today. The S&P 500 was lower by 0.37% and the Dow was off by 0.21%. There was some profit taking on earnings after the market closed at all-time highs yesterday. There were also some hawkish comments made from a Fed member this morning. Fed Chairman Bernanke is set to speak tomorrow. A few weeks ago his comments frightened the market and last week his comments were a big boost. Tomorrow we'll find out how the market reacts to his comments this time around.
June CPI came in higher than expected with an actual reading of 0.5% against an estimate of 0.3%. Gas prices spiked in the month as the summer driving season got underway. The July NAHB Housing Market Index came in at 57 against a consensus estimate of 51. The number was ahead of virtually every estimate that made up the consensus number. The recent spike in interest rates spurred people to get off the sidelines and make a purchase before rates go any higher.
Technology and telecom services were the leading sectors on the day while consumer discretionary, healthcare, and energy were laggards. There was profit taking in the financial sector after Goldman Sachs and Comerica reported. After hitting a new high yesterday Charles Schwab sold off after they reported earnings and sellers came in and captured some profit.
Commodities were mostly higher, with precious metals, copper, grains, and natural gas all trading ahead of the tape while crude closed slightly lower.
Semiconductors were the leading area of the tech sector today. Semi’s were strong across the board. Semiconductor capital equipment stocks also were well ahead of the market.
The housing data released today showed that all regions of the country improved with sales, future sales, and buyer traffic data all increasing more than expected.
The consumer sector traded lower with the market. Coca-Cola traded sharply lower at the open on lower than expected sales data. The stock regained roughly half of its opening losses by the end of the day. Discount retailers traded ahead of the department stores. Tobacco stocks outperformed.
Healthcare was lower, roughly in line with the market. Hospitals and drug stores outperformed while managed care and biotech lagged. Johnson & Johnson soundly beat earnings expectations and opened strongly and reached an all-time high intraday before closing the day flat.
Source: PFS Group
