U.S. Equity Market Radar (March 5, 2012)
The S&P 500 Index managed modest gains again this week rising 0.34 percent with the consumer discretion and financial sectors leading the way.
Strengths
- The S&P 500 consumer discretionary sector was generally boosted by strong same-store sales as retailers benefitted from warm weather. Within the sector, leaders were Sears, Priceline.com and The Gap.
- In financials, large cap banks led the way with JPMorgan Chase and Citigroup the top two performers in the sector.
- Other standout performers in the S&P 500 included Micron Technology, International Paper and Wynn Resorts.
Weaknesses
- In a reversal from last week, the energy sector was the worst performer this week as oil fell by nearly 3 percent. Coal companies such as Alpha Natural Resources and Peabody Energy were among the worst performers as the warm winter left coal stockpiles well above historical norms.
- Industrials also fell for the week as many machinery names were weak, such as Joy Global, Dover Corp. and Caterpillar.
- For the second week in a row, First Solar was among the worst performers in the S&P 500 as industry dynamics remain very difficult for solar companies.
Opportunities
- The market has been able to shrug off every negative and continue to climb the proverbial wall of worry.
Threats
- After such a strong start to the year, a pullback or consolidation in the market would not be surprising.
