Daily Market Recap

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The S&P 500 gained 0.48% and the Dow was higher by 0.35%. Many pointed to the dovish commentary by Janet Yellen in her confirmation hearing today. She stuck to the script the Fed has used for several months. She feels the Fed needs to be data-dependent as to when QE should slow and not set a date. She did answer a direct question regarding asset bubbles and said she did not see any.

More interest rate sensitive areas of the market were in favor today in response to the dovish comments from the Fed. Homebuilders, telecom, utilities, and REITs were strong. Financials were also strong posting a gain of 0.89%. Tech underperformed as Cisco sold of more than 10% in response to disappointing earnings.

Commodities were mixed. Precious metals and natural gas outperformed the tape while copper, crude, and grains underperformed.

The bank index was strong today. Regional banks were especially strong and giants Wells Fargo and Bank of America were also higher. Insurance stocks paced the sector posting a gain of 1.3%.

Industrials were in line with the tape. Multi-line industrials were in favor after Tyco reported strong earnings. MMM moved to another new high posting a gain of 1%. Capital equipment names underperformed on fears of slowing growth in China.

Homebuilders extended recent gains in response to both positive earnings surprises and the dovish Fed comments. There is also an industry conference going on this week. Management presentations are being favorably received. Based on CEO commentary, analysts have more faith in the sustainability of the housing recovery.

Transports again performed well. Airlines continue to move higher on positive passenger data and favorable commentary on merger related topics. Parcel delivery companies UPS and FedEx continue to perform well.

Internet stocks fared well on the Cisco selloff. Money was moving from old tech to new tech. High beta has been back in favor in technology/Internet over the past few sessions.

Healthcare rallied led by biotech and pharma. Pfizer continues to move to new cycle highs. Amgen was a standout in the biotech space. Hospitals underperformed after disappointing ACA enrollment numbers were released.

Source: PFS Group

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