Daily Market Recap

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The S&P 500 declined by 0.26% and the Dow was lower by 0.43%. Leading sectors were consumer discretionary, energy, industrials, and materials. The areas of the market that were weak were consumer staples, financials, technology, and utilities.

Stocks got off to a slow start as the September Consumer Confidence number came in slightly below expectations. The reading from September came in at 79.7 versus the 81.8 in August. The survey’s labor market differential continued to narrow in September which is favorable ahead of next week’s employment report.

The July Case-Shiller housing index climbed 12.4% in July. This was above the consensus expectation of an increase of 12.0%. Housing price gains continued but the gains were not as broad based as in recent months.

Semiconductors were the leading area of technology today. Applied Materials jumped 9% after they announced the acquisition of Tokyo Electron. This deal increases AMAT’s market share in key markets and will allow their management team to streamline Tokyo Electrons cost structure.

Industrials were a leading sector on the day posting a gain of 0.25%. Illinois Tool Works spiked by close to 3% after they announced they were going to sell off a slower growing division. The company will now be able to focus more energy on its faster growing divisions and will use the proceeds from the sale to invest in these divisions and buy back shares. The sector continues to benefit from strong economic reports here in the U.S. and from China.

Shipping stocks were sharply higher today. Diana Shipping gained more than 3%. Aegean Marine Petroleum also spiked higher by more than 3%. Continued improvement in shipping rates, after several years of decline, helps these names. Rates in China are spiking as old stockpiles of commodities need to be replenished.

Aerospace and defense names gained close to 1%. Boeing was a leader with an increase of 1.5%. This area has been strong all year and moved higher today after recent profit taking.

Better than expected earnings reports helped the housing sector. Lennar reported strong numbers and gave better than expected guidance on their post earnings conference call. The stock gained better than 4% on the day.

Airlines and truckers were leadership areas for the transports. Continued pressure on crude prices and the sharp decline in gasoline futures have helped the area.

Restaurant stocks continued to perform well. Starbucks gained better than 2% on positive analyst commentary. They could potentially save over $200 million over the next few years due to lower coffee prices. Continued success in their packaged goods division and strong traffic in stores makes confidence in Starbucks high.

Source: PFS Group

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