The usual volatility of earnings season has not raised its ugly head here in 2013. Trading remained very subdued in the middle of the second week of earnings season. The market started off slightly lower as it has for the past several days. Selling was subdued and buying activity picked up throughout the day. The S&P 500 finished fractionally higher and the Dow was off by 23 points.
There have been relatively few major earnings surprises or disappointments to lead the markets this week. The macro stories that have roiled markets for the past several months—the fiscal cliff and debt ceiling, for example—have faded into the background. News from European markets or Washington just hasn’t had any impact on the market this week.
The S&P 500 has consolidated its gains from the first week of trading. The index has moved between the 1460-1475 range. Banks, semiconductors and airlines were leaders today with telecom, utilities and materials as laggards. Financials continued their advance higher. Banks moved higher after Goldman Sachs released strong earnings. More major banks will report earnings over the next few days.
An esteemed technician called the bottom for Apple after the close yesterday. He was right today at least. The stock traded higher by more than 4%. Tom DeMark, famous for making several correct market calls through the years, made the call that Apple selling has been exhausted and he put a near term technical target on the stock of $600.
Technology was also helped by a strong move higher by semiconductors. Several of the companies that supply semi’s to Apple traded significantly higher today.
Hewlett Packard was also a big mover on rumors that they may be willing to sell off parts of their business.
Transports closed at another 52-week high after they eked out a small gain today. Truckers, parcels and the rails all worked higher.
Industrials trailed the market today. Multi line industrials and late stage cyclicals were quiet ahead of GE’s earnings report Friday. Machinery and capital equipment stocks were fairly quiet and lagged the market.
Materials were the laggard today. There was weakness in precious metals, base metals and chemicals today. Steel stocks were off between 1.5%-2.5% after iron ore closed down by over 5% last night.
Source: PFS Group
