The S&P 500 rose by 0.67% and the Dow climbed by 0.39% today. The market opened higher and added to those gains after Fed Chairman Bernanke spoke. The market backed off the intraday highs to post solid gains. Fears over the situation in Cyprus subsided today and the statements from the Fed were more dovish than anticipated. Healthcare, consumer staples, retail and homebuilders were leading areas with transports, banks and technology lagging the broad averages.
Large cap healthcare names like Johnson & Johnson, Pfizer, and Eli Lilly all outpaced the markets. The strong growth rates and attractive dividends of these total return type stocks are in favor in the current low growth environment. Walgreens was another healthcare name that performed well, receiving an upgrade from an influential analyst. The growth oriented area of healthcare, biotech, also outperformed the tape. Amgen drove the biotech space higher after they announced favorable phase 3 results regarding a cancer drug.
Commodities were mostly higher with crude, copper, and grains trading ahead of the tape while precious metals and natural gas closed lower on the day. Gold was off 0.44% and copper traded higher by 0.87%. Crude was higher by 0.87%.
Homebuilders/building products were a leading industry group today. Lennar reported better than expected revenues, earnings and future orders. On their conference call, management said that the housing recovery is consistent and getting stronger, and they feel this is the beginning of a multi-year recovery.
Consumer discretionary stocks were strong today led by retail. Williams Sonoma rallied by more than 10% after they reported quarterly earnings. Dollar thrift stores all soared higher today. Casual dining restaurant stocks also outpaced the market.
Most of the stocks in the transport sector traded higher but the sector underperformed due to the negative reaction to earnings released by FedEx. They announced earnings below expectations. U.S. package volume was strong but international export volumes were weak and have not shown signs of improvement.
Source: PFS Group
