Daily Market Recap

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The S&P 500 declined 0.47% and the Dow was lower by 0.35%. It was an extremely quiet day today on trading desks as volumes were especially light. Today and tomorrow will be the peak of quarterly earnings season. A little less than 40% of the companies in the S&P 500 have reported quarterly earnings and 76% posted earnings ahead of expectations. Financials and materials are posting the biggest upside to date.

Financials were a lagging group today. Insurers and banks were particularly weak. European banks and investment houses set a negative tone for the opening of trading here. European financials suffered from profit taking today after many names in the space broke out over the past week. Insurance stocks sold off somewhat sharply with life stocks particularly weak. Asset managers outperformed.

Tech underperformed the broad market averages. Year-to-date, one area of strength, semiconductors, was off on weak earnings from Cree and Altera. Storage was weak as EMC sold off sharply. Apple continues to be bought after the recent move above intermediate-term resistance levels.

Even with a sharp sell off from Caterpillar, the industrial sector traded ahead of the tape. Aerospace and defense were areas of strength today. Boeing was the leader posting a gain of more than 5% on better than expected earnings. Northrup Grumman gained over 4% in sympathy.

Transports gained 0.75% on strong earnings releases from the rails. Norfolk Southern had a massive breakout posting a gain of close to 7% after they reported much better than expected earnings. Shipments of coal and intermodal shipments were the catalysts for the positive earnings surprises.

Energy was the weakest sector on the day posting a loss of 1.25% on lower crude and natural gas prices. The group had been aggressively higher over the last several sessions. Most of the move today looked like simple profit taking.

Media was in line with the market. Theme parks were an area of weakness after Six Flags released disappointing earnings. Internet names that have not reported for the quarter yet came under pressure. There was little in the way of news in the group, there were just more sellers than buyers today.

Telecom outperformed today on lower interest rates and a strong earnings report from Verizon. Stocks in the space traded up in anticipation of the earnings release from AT&T after the close.

Source: PFS Group

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