U.S. Equity Market Radar (February 13, 2012)
The S&P 500 Index ended with a weekly loss for the first time this year. Technology, consumer staples and consumer discretionary sectors were the best performers, while materials, financials and health care were the laggards.
Strengths
- The technology sector had a strong week, as Apple rose 7 percent as the company is expected to release the new iPad3 in early March. Apple is the largest company in world based on market capitalization at $460 billion and is the largest weight in the S&P 500.
- Elsewhere in the S&P 500 Technology sector, Computer Science, Akamai Technologies and JDS Uniphase all jumped more than 12 percent this week.
- In the consumer areas, tobacco stocks were very strong as Lorillard rose nearly 10 percent for the week and Philip Morris International rose 5 percent. Both companies reported earnings this week and reported solid pricing power.
Weaknesses
- The materials sector lost more than 2 percent this week with broad-based weakness across the sector.
- Financials fell by more than one percent as concerns began building again regarding the Greek bailout.
- Among the worst performers in the S&P 500 this week were TripAdvisor, Joy Global and Western Union, all falling by more than 10 percent.
Opportunities
- Earnings results have been encouraging so far and the market has responded, and while we have passed the peak, we still have another week of numerous earnings announcements.
Threats
- The year began with five weeks of gains in equities and the market suffered its first minor setback this week. After such a strong start to the year, a pullback or consolidation in the market would not be surprising.