The S&P 500 finished the week with an increase of 0.88% and the Dow was higher by 0.07%. Stocks traded higher as most of the cyclical sectors that led to the downside yesterday rebounded today.
Homebuilders, transports, media, and banks performed well today. Industrials, technology, and energy were weak today. Data on homebuilders remains volatile and those stocks continue to vary wildly in performance on a daily basis. There was a snap back rally from the homebuilders today after data earlier in the week was disappointing. Transports are moving higher today. The rails are leading to the upside today. Yesterday, industry leader Union Pacific reported better than expected earnings and today Kansas City Southern announced better than expected earnings. The railroads are seeing increased shipments of materials into the Bakken oil fields. They also benefit by moving the resulting oil out of the fields.
The large media conglomerates continue to move higher. Disney moved out to another new high today. News Corp and CBS were also up sharply. In general, media stocks have reported better than expected earnings so far.
Financials are bouncing back today. Capital One Financial reported better than expected earnings. Some of the large banks that experienced profit taking after releasing earnings earlier in the week moved sharply higher today. Regional banks were higher after Suntrust and Fifth Third Bancorp reported better than expected earnings on strong loan growth.
Trading in technology stocks was mixed today. Some key technology companies reported earnings after the close yesterday. Google and Microsoft responded favorably to their reports and IBM was lower. Microsoft was up more than 3% on the day and Google rose by better than 4%. IBM was punished as it fell by more than 8%.
Industrial earnings were similar to technology. Some large industrial stocks reported weaker than expected quarters and other beat expectations. Honeywell climbed by close to 4% on the strength of their quarter. GE sold off sharply after they reported earnings prior to the open.
Healthcare stocks outperformed the market on the strength of biotech and drug stores. Several analysts raised their earnings and price targets on several biotechnology companies today.
Consumer staples continued to lead the market. Soft drink stocks had another strong day. Coca-Cola and Pepsi both reported better than expected earrings earlier in the week. Mondelez (spun off from Kraft) was up by more than 5% after it was reported that activist investor Nelson Peltz took a stake in the company.
Source: PFS Group
