U.S. Equity Market Cheat Sheet (July 4, 2011)
The figure below shows the performance of each sector in the S&P 500 Index for the week. All ten sectors made gains. The best-performing sector for the week was energy which increased 7.17 percent. Other top-three sectors were technology and consumer discretion. Consumer staples was the worst performer, up 2.87 percent. Other bottom-three performers were utilities and healthcare.
Within the energy sector the best-performing stock was Marathon Petroleum which rose 13.29 percent. Other top-five performers were FMC Technologies, Halliburton, National Oilwell Varco, and Valero Energy.
Strengths
- The footwear group was the best-performing group, up 13 percent on the strength of its single member, Nike. The company reported fiscal fourth quarter earnings and revenue above the consensus estimates, and it raised its fiscal 2015 revenue target to a new range of $28 billion to $30 billion, up from its previous target of $27 billion announced in May 2010.
- The casinos & gaming group gained 12 percent on strength in its largest member, Wynn Resorts. The Macau government said Friday that Macauās gaming revenue in June increased 52.4 percent year-over-year.
- The trucking group was up 11 percent, led by its single member, Ryder Systems. The firm announced this week that it had secured agreements to lease 87 heavy-duty trucks powered by natural gas.
Weaknesses
- The retail computer & electronics group underperformed, gaining less than 1 percent. The groupās largest member, Best Buy, lost 1 percent.
- The tobacco group also underperformed, rising 1 percent. Two members of the four-member group declined less than 1 percent. The government recently announced rules which will require tobacco companies to place unpleasant graphic health warnings on their packages.
- The food distributor group underperformed, up 2 percent, led by its single member, Sysco.
Opportunities
- There may be an opportunity for gain in merger & acquisition transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.
Threats
- The end of quantitative easing on June 30 might result in a weaker economy.
