Both the S&P 500 and the Dow closed at record highs today. Earnings were mixed with some stocks roaring higher on better than expected results and many releasing disappointing numbers.
The Philadelphia Fed manufacturing number came in well above expectations. The actual number was above every estimate that made up the consensus number. The actual number of 19.8 crushed the expected reading of 5.3 and was the highest level since 2011.
Managed care, airlines, rails, and banks were the leading areas today and telecom, semis, homebuilders, and retail underperformed.Managed care was higher on strong earnings from United Healthcare. American Airlines was a leader in the transportation space along with Union Pacific railroad.
The large investment banks and money center banks led the financial sector higher. Earnings from the semiconductor area were mixed. Intel sold off after earnings while some of the small semi makers were aggressively bought today post earnings.
Aerospace and defense names worked higher again today. Boeing benefitted from news that they were not at fault for problems with the 787. Defense contractors like L3 Communications, Northrup Grumman, and Lockheed Martin all were strong today.
The transports rallied by 1.5% as rails, airlines, truckers, and parcels were higher. CSX and UNP both moved higher after reporting earnings. Rails have a new catalyst coming from the oil patch. Oil over rails from the fields to the refineries is a major positive for the group. Parcels and truckers both soared on little news today. Both are leveraged to the general economy getting stronger. Federal Express roared ahead by 4.2% and is up 10% for the month.
Energy was a strong group. Exxon broke above technical resistance and broke out of its trading range. Crude was higher by 1.5% and natural gas soared by 5%.
Internet giants, eBay and Yahoo, were lower today. eBay sold off sharply on disappointing forward guidance. Yahoo cooled after gaining more than 10% yesterday. Smaller internet related companies continue to perform well. LinkedIn rose by 3% to close over $200. Chinese internet leader Baidu broke out on heavy volume.
Consumer discretionary traded higher while staples underperformed. Pepsi traded higher after activist investor Nelson Peltz detailed his restructuring plan for the company. Herbal Life moved higher after Carl Icahn talked about his stake in the company at a major investors conference. Restaurants bounced back after selling off for the past few sessions. Tobacco stocks worked lower after releasing disappointing sales data.
Source: PFS Group
