The S&P 500 fell by 0.55% and the Dow was off by 0.43%. The futures market sold off sharply in response to a bailout vote on Cyprus.
At the close of trading on Friday no one predicted that depositors in Cyprus would come under so much pressure. Everyone was surprised that depositors that held less than €100,000 would have a 6.75% “wealth tax” levied on their savings accounts. The market rallied to flat on the day and it appeared as if the market would shake off this latest crisis from Europe. But in the last hour of trading it appeared that market participants came to the belief that the Cypriot leader may lack the votes necessary to pass the deposit levy. The government plans a vote for tomorrow but it is tentative because parliament will not vote until knowing it has secured enough support for approval.
Telecom, utilities and technology stocks were market leaders today and materials, financials and consumer discretionary stocks lagged. The high yield of utility stocks made them an attractive sector today. Technology rallied behind an analyst upgrade of Hewlett Packard and a continued rally in Apple. Apple broke above a downtrend line last Friday and gained better than 2% today. Weak growth figures from China put the materials space under pressure today.
Cable stocks rallied on news of Liberty Media taking a 25% stake in Charter Communications. Media giants, Disney and News Corp, traded lower after moving aggressively higher last week. Verizon was one of the best performing names in the S&P and in the telecom sector. Verizon moved higher after the company received an analyst upgrade.
Energy traded lower by roughly 1%. Service companies, drillers and integrated oil companies all traded lower. Refiners saw some profit taking last week after aggressive moves higher for the past several months. Refiners were the best performers in the energy sector today with many of them gaining more than 1%.
Transports were off slightly today. Rails, parcel companies, and truckers all traded lower. Airline stocks continued to move higher. Sky West traded higher by close to 3% and UAL Continental and US Airways also traded higher.
Homebuilders were down in early trading after the March NAHB Housing Market Index came in below expectations. The stocks rallied for much of the day after reaching a low.
Trading in financials was mixed. Credit card names continue to move higher after the release of stress test results. Money center banks, Citigroup and JP Morgan, both traded lower.
Commodities were mostly higher as precious metals, crude, corn and natural gas all traded ahead of the tape. Gold rose by 0.80% today and silver rose by 0.39%.
Source: PFS Group
