The S&P 500 declined 0.37% and the Dow was off by 0.24%. Airlines, transports, and asset managers were weak and telecom and utilities were leaders on the day. Recent outperformers saw profit taking and higher yielding issues were in favor ahead of Fed meetings later in the week.
U.S. pending home sales were slightly lower in June after a strong increase in May. Pending home sales were down 0.4% in June after a 5.8% increase in May. The weaker numbers reflect the recent spike in interest rates.
Financials lagged all day on limited news flow. There was little in the way of reporting from the sector today. Weakness was across the board. Money center and regional banks were both weak. Asset managers reported mixed earnings results last week. Names that reported disappointing earnings were under pressure again today. Many groups within the sector have experienced major moves higher and saw orderly pullbacks today.
Technology was flat today and outperformed. Apple led the sector higher. The name continues to move higher after earnings last week. Apple moved above its 50 day moving average last week and continues to improve technically. Semiconductor stocks saw sharp spikes in response to earnings last week. These stocks experienced profit taking today.
Defense names traded just ahead of the tape. Many stocks in this area had sharp spikes higher last week in response to earnings. The fact they essentially went sideways after big runs speaks to their current strength.
The transports saw profit taking in the rails and airlines. The index has been down since reaching a new cycle high early last week. The pullback in the last few days has been sharp but comes after aggressive moves higher for many names in the sector.
Energy was one of the weakest sectors in the market today, declining 0.75%. Crude was off slightly and natural gas was lower by 2.75%. Solar stocks were an area of strength in the sector.
Internet stocks were lower on some profit taking and a negative article in Barron’s. The names that were up the most on positive earnings surprises last week saw some profit taking after explosive moves higher. Over the weekend Barron’s contained a story that was negative on some names in the group.
Source: PFS Group
