The S&P 500 rose 0.63% and the Dow was higher by 0.69% as the markets rose for the 20th consecutive Tuesday. While the averages closed higher they closed well of their respective highs.
There was a rotation out of safe-haven sectors. Banks were upgraded by Moody’s. Banks are also seeing buying because increasing interest rates actually improves the net interest margin for banks. Retail was strong as Tiffany released better than expected numbers.
Commodities were mostly lower with precious metals, copper, wheat, and natural gas trading below the tape. Gold and silver finished near their lows of the day.
The Conference Board consumer confidence survey was stronger than expected. The headline number increased 7.2 points to 76.2. The consensus estimate for the May number was 62.5, with the previous number being 68.1.
The Case-Shiller housing price index surprised to the upside again. The 20-city composite house price index increased 1.1% in March and there were upward revisions to the prior data for the past four months. The data for this reading has shown a clear upward trend for house prices for the past several months. There is little inventory on offer right now and the mix has shifted to fewer distressed sales.
Financials had a strong day finishing up 1%. The bank index climbed by 1.3% today. Higher interest rates will have a positive impact on names like Charles Schwab, Northern Trust, and State Street. Large investment banks, Morgan Stanley and Goldman Sachs, were also higher on the day.
Semiconductors were a strong industry group within the technology sector. Semiconductor names and capital equipment stocks were strong. Large cap hardware names IBM, EMC, and Hewlett Packard were all up roughly 1%.
Energy was strong gaining 1%. Crude traded higher by 1% and natural gas was off by 1.5%. Integrated names like Chevron and Exxon were up slightly more than the market. Names that focused on the exploration of oil were in favor. Deep water drillers also outpaced the market.
The media sector was led by the content-centric names like Disney and CBS. Internet media companies also performed well. eBay was strong all day and closed higher by better than 1%. Amazon and eBay were helped by reports that the e-commerce bill is having a hard time getting through the House.
Consumer discretionary outperformed the broader market and the staples area today. Tiffany and Michael Kors were two retailers that traded higher on positive news. Sears and Gamestop were both off sharply. Restaurants and auto related names were top performers on the day.
Source: PFS Group
