The S&P 500 declined by 0.38% and the Dow lost 0.31%. Stocks closed well off their intraday lows and notched losses for the third straight day. Certain areas—telecom, healthcare and utilities—were the leading areas of the market in today’s trading. Banks, semiconductors, and retail lagged the tape. There was very light trading on all exchanges today and there was a lack of conviction on the part of both buyers and sellers.
Commodities were slightly higher with precious metals, copper, and corn outperforming the tape while crude and natural gas were lower.
After spiking higher on strong earnings, financials continued to display weakness today. The bank index fell by close to 1%. Some cited President Obama’s speech regarding housing and GSEs as a reason for the selling. Insurance stocks were lower across the board on low volume. REITs were the best performing group in the sector.
Overall technology traded slightly lower in the day but there were some large winners in the space. Some smaller telecommunications equipment stocks broke out on heavy volume on better than expected sales trends. Computer Sciences Corp broke out to multi year highs on better than expected earnings. CSC closed higher by 8.5%.
Housing stocks were weak all day. President Obama gave a speech after the close yesterday where he announced support for a bill that would unwind Fannie Mae and Freddie Mac. This was viewed as a clear negative for homebuilding stocks.
Crude oil traded lower by 1% and energy stocks were in line with the broad market. EOG Resources was a leader in the space after management increased production guidance. Solar stocks were weak on disappointing earnings. The solar space sold off aggressively.
Healthcare stocks were flat on the day. HMO’s were an area of strength. The space responded favorably to strong earnings from Well Care Group.
Retail led the consumer discretionary sector lower. Polo Ralph Lauren fell 8.6% on weaker than expected earnings and disappointing guidance. An extended winter and late start to the spring sales season put several retailers under pressure today.
Source: PFS Group
