The S&P 500 was lower by 1.4% and the Dow declined by 0.94%. The market is now off just under 3% from the recent 52-week highs. Concerns over European growth and what the swoon in commodities is telling us about future growth put the market under pressure from the open and selling remained heavy throughout the day.
Financials were off sharply today. Goldman Sachs and Bank of America both reported earnings prior to the open. Both stocks sold off sharply although most analysts felt the quarters were “not that bad”. The fear is that there weren’t enough positives from the companies to create incremental buyers for the stocks. Life insurance companies sold off also and REIT’s were the best performers in the financial sector.
Technology was led lower by a large selloff in Apple. Apple closed lower by more than 5%. Many component makers that supply Apple were also hit hard. Semiconductors were the weakest group in the tech sector. Many semi’s were down sharply after some companies in the space reported worse than expected earnings. Intel’s numbers this week were better than expected but the results posted today were disappointing.
Industrials were hit again today. News regarding the weak GDP numbers from China continues to put the sector under pressure. Capital equipment stocks with exposure to commodities were weak as well. Transports traded lower also. Earnings in the rails space from CSX were not favorably received. Management did guide numbers for the rest of the year higher but the stock was sold off.
Media stocks outperformed the market today. Disney was virtually flat and Time Warner was down by less than 0.50%. Content centric names like Viacom were also strong performers on the day. Yahoo released disappointing earnings after the close yesterday but the stock was off by less than ten cents today. Investors felt the long term thesis was intact with Yahoo.
Healthcare stocks were an area of strength. Johnson & Johnson rose on the down day. Eli Lilly was also high and other large names like Merck and Pfizer were off slightly.
Source: PFS Group
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