The S&P 500 closed off by 0.59% and the Dow was lower by 0.70%. Yesterday the major averages bounced off support at their respective 50-day moving averages. Today they failed to breach their 20-day moving averages to the upside. The markets tried to rally in the morning but found sellers ahead of the weekend.
Defensive sectors were relative outperformers today. Financials and energy were laggards. Financials declined by 1.3%. American Express traded lower by 3.0% after a major firm lowered their forecast on the stock. Brokers, Morgan Stanley and Goldman Sachs, traded lower, but their decline today was by less than their large move higher yesterday.
Producer prices ended two straight months of declines and increased by 0.5% in May after declining 0.7% in April. Consensus estimates called for an increase of 0.1%. The increase in producer prices was due almost entirely to higher food and energy costs. A spike of 41% in egg prices was a large component of the food price hike.
Commodities were mostly higher with precious metals, copper, and crude trading at gains. Grains and natural gas traded lower. Gold closed near its highs with copper trading to the upside also.
Large cap tech names were laggards today. Mega caps like Microsoft, Apple, and Oracle all traded lower on little news. Semiconductors were leading for much of the morning but closed in the red. Semi’s did trade ahead of the tape.
Healthcare names are outperforming the broad market averages. Drug stores and distributors are leading and managed care and biotech traded lower.
Consumer staples held in nicely today. People liked the total return high-dividend stocks in this area today. Restaurant stocks continue to lead the consumer sector.
Source: PFS Group
