Both the Dow and S&P 500 were off slightly after the great run higher over the past few weeks. Things were quiet for much of the day. There was an attempt at a rally mid-day that failed to hold and the large averages sold off fractionally. The small cap Russell 2000 Index was higher on the day and hit multi-year highs today. Banks, steel, and industrials were leaders today and healthcare, media, and staples were laggards.
Commodities were mostly higher today as some metals had intraday reversals from recent lows. Copper was stronger as the Shanghai index in China was higher. Better market action in China has a positive impact on the red metal. Natural gas and oil were both higher on the day. Oil rose by 0.7% and natural gas was higher by 0.84%.
Strength in the underlying commodities had a positive impact on energy stocks. Barron’s had a positive article on coal stocks and solar stocks saw buying from momentum players. Major integrated names, Exxon and Chevron, broke out to new highs. The oil services ETF had a technical breakout above resistance showing that the move in energy today was broad based.
Consumer staples were a leading area for much of the year. Many of the largest names in that space were the victims of profit taking in today’s trading. Many names hit fresh 52-week highs recently. Some money moved from those names into more economically sensitive names today. There were no major downgrades or negative releases from leading staple names today.
Homebuilders/building products stocks were higher ahead of a major investor conference in the space tomorrow. There was some positive commentary ahead of the conference regarding some of the leading companies that will be presenting.
Engineering and construction names were higher today on news regarding the construction of liquid natural gas infrastructure. Several names associated with LNG and oil service/construction stocks have moved out to new highs over the past several weeks.
Multi-line industrial names with broad based global businesses were beneficiaries of the increased appetite for cyclical stocks. Danaher, General Electric, MMM, Illinois Tool Works, and Danaher were all well ahead of the tape today.
Source: PFS Group
