The Dow was higher by 0.82% and the S&P 500 closed at a new high rising 1.01%. Hedge fund titan David Tepper set the tone for the market this morning on an interview on CNBC prior to the open. He feels the U.S. economy is in a “goldilocks” phase when it comes to growth and the stimulus provided by the Federal Reserve.
He feels the Fed will find a “natural” way to ease out of their program that is currently buying bonds in the open market. Also, he explained there is over $400 billion dollars on the sidelines now that is looking for a home in various investments.
Financials and airline stock led the market today while technology and media stocks lagged. Airline stocks were helped by the rails in driving the Transportation average to another high. Union Pacific roared to another all-time high, trading higher by 1.98%. Airlines rallied as presentations made at a major conference were favorably received.
Several names in many industry groups within the financial sector broke to new highs. Brokers and asset managers were higher on optimism the trading and management revenues will be higher than expected in the second quarter. Part of Mr. Tepper’s presentation this morning focused on Citigroup in particular and banks in general. Citi moved higher by 2.4% and Bank of America was higher by 2.77%. Morgan Stanley was up 2.5% as investors liked what they had to say at a major presentation for analysts. Insurance names and regional banks were up across the board also.
Technology had a quiet day, and lagged the market. Apple sold off. Semiconductors took a breather from their recent rapid advance. Semis started the day in negative territory before a final hour rally. The semi index finished higher but lagged the market. eBay bucked the trend for the sector as it was higher by 1.70%.
Aerospace and defense names were the leading group in the industrial sector. Multi-line industrials were higher but lagged the tape. Some heavy equipment names were off after sharp advances and negative reports about growth prospects in China.
Energy was a leading sector today. Major integrated names like Chevron (+1.75%) and Exxon (+1.12%) were strong on the day. Crude was off slightly and natural gas climbed by 2.25%. A positive move in spreads helped the refiners today. The space has become increasingly volatile and has seen major swings over the past several weeks.
Retail stocks moved higher ahead of a huge week of earnings announcements in the space. Several major retailers will report earnings over the next few days. Investors bid those names higher today ahead of the announcements. Soda Stream roared ahead by 11.9% as investors piled into the name after positive recent earnings.
Source: PFS Group
