Daily Market Recap

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The S&P 500 and Dow both ended lower by 0.90% today. The drama in DC is dragging on longer than expected and a shooting in the nation’s capital added uncertainty to today’s trading. Volume was especially light today.  There was no panic selling but there was also no concerted effort to buy any dips.

The market closed 0.50% off its intraday lows. Cyclical sectors underperformed with homebuilders, transports, industrials, and steels lagging the averages. Telecom, managed care, and staples outperformed. Airlines were helped by positive guidance from Delta and US Airways.

Non-manufacturing ISM numbers came in a little light this morning. The level reached today is consistent with 2.0% GDP growth. The September ISM Services number was 54.4 versus a consensus estimate of 57.2 and the August level of 58.6. Atlanta Fed President Lockhart said the decision not to taper last month has been justified by recent events in Washington.

Financials rebounded off their early morning lows but still suffered steep losses. Comments made by Boehner regarding the debt ceiling helped bring buyers in later in the day. The bank index outperformed the broad market averages posting a loss of 0.50%.

Media stocks were hurt by the negative macro backdrop of the day. Weaker macro data points to lower ad spending later on. Disney continued to trade poorly while CBS and Viacom are still favorites in the space. Gaming stocks were lower as September numbers were only in-line with expectations. Disappointing macro data hurt lodging and cruise names.

Industrials lagged the tape. Aerospace and defense names, which could be negatively impacted by the shutdown, were especially weak. 

Healthcare outperformed with biotech and life sciences lagging. Hospital stocks continued to outperform. Medical equipment stocks underperformed after an analyst downgraded many names in the group.

Consumer staples traded ahead of discretionary stocks today. Clorox was sharply lower in the morning but closed flat after an analyst meeting concluded. Casual diners were weak. Buffalo Wild Wings was lower by 4%, giving back part of the big gains posted over the past two days.

Source: PFS Group

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