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Daily Market Recap

Mon, Sep 23, 2013 - 3:15pm

The S&P 500 declined 0.47% and the Dow was lower by 0.32%. Stocks slowly ticked lower the entire morning session. There was an afternoon rally and then a relatively quiet finish. Seven of the ten sectors were lower on the day. Technology and telecom services posted slight gains and utilities gained better than 1%.

Apple soared after better than expected demand this weekend from their new product offerings. Management raised fourth quarter revenue forecasts after they posted record sales this weekend. RF Micro Devices, Cirrus Logic and Skyworks are device suppliers to Apple that rose sharply on the sales figures. Blackberry was halted down over 5%. The stock spiked after it was disclosed that their largest shareholder, Fairfax, was going to buy the remaining shares of the company.

Industrials were down on the day but some of the major multi-line industrials like GE and MMM were up strongly all day. The names reacted to better than expected Chinese PMI numbers. The actual number of 52.1 came in above the consensus expectation of 51.1 and was the best reading since April.

The transportation index saw profit taking after a sharp rise over the past several sessions. Last week the group was a leader after crude posted a pullback in response to the diminished possibility of a U.S. strike in Libya. After the move higher last week the retreat today was orderly.

Consumer discretionary underperformed while staples traded in line with the broad market. Beverages were the weakest area of the staples space with names like Monster and Coke performing poorly all day. Best Buy was helped by stronger than expected sales generated by the Apple product launch. Restaurant stocks added to the weakness seen Friday after Darden reported weaker than expected numbers.

Homebuilding stocks remain volatile. The space was sharply higher after the Fed announcement last week. The announcement led to a sharp move lower in interest rates and reset the clock with regards to when mortgage rates would begin to move appreciably higher. There was profit taking after the move higher at the end of last week and ahead of earnings announcements by several names over the next couple of days.

Financials were the weakest area of the market today. The bank index fell by more than 1.5%. There were some articles suggesting that Citigroup is going to have trouble making its quarter. With the delay in the start of tapering the net interest margin of these companies will not expand as fast as thought. Many names in the space moved higher in anticipation of the Fed tapering decision.

Source: PFS Group

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