Stocks started slowly today. Futures were off on reports that the World Bank reduced growth forecasts in Asia. There were no real catalysts today to spark either the bulls or bears. Buyers came in near the end of the day to push stocks off their lows. The S&P 500 closed off 0.3% and the NASDAQ was down 0.8%.
Energy was an area of strength today. Marathon Petroleum spiked higher at the open and closed up 5.4% on the day. Marathon announced they were purchasing BP’s Texas City Refinery. The market liked the acquisition and Marathon closed at all-time high. Coal stocks continued to trade higher. Coal names have been doing well since they were highlighted by Mitt Romney in the debates last week.
Transports continued to strengthen today. The index has lagged the broader market for several months. Transports outperformed markedly last week. Transports were up 0.2% today. Strength was seen in airline and railroad stocks. Alaska Air, Norfolk Southern, CSX and Union Pacific all traded higher.
Healthcare outperformed the broader market today. Money rotated out of the big winner this year, biotech, and was moving into HMO’s. There was continued speculation regarding mergers in the HMO space.
Tech stocks traded down again today. Longtime leader Apple traded significantly lower. Apple closed off more than 2% and closed below its 50 day moving average. Semi’s traded lower on the back of analyst downgrades. Concerns over future PC growth and the lack of a major catalyst is putting the semi space under severe pressure.
Financials were slightly lower today. Several major banks report quarterly earnings later in the week. Several leaders in the banking sector will report earnings prior to the open Friday. Homebuilders traded off today after the huge run higher last week. Selling in the space remains orderly given the magnitude of the recent advance. AIG was a leader in the sector as it aggressively broke above resistance, climbing 1.9% on the day.
News of reduced growth forecasts in China hurt the industrial sector. Large multi-line industrials led the way lower. Machinery and capital equipment stocks traded lower. Aerospace and defense issues were slightly lower. MMM was an outperformer, as it traded up all day.
Source: PFS Group
