U.S. Equity Market Radar (June 25, 2012)

June 25, 2012

2 minute read

U.S. Equity Market Radar (June 25, 2012)

The S&P 500 Index fell 0.58 percent this week as the global equity markets fretted over the global growth outlook. The health care and information technology sectors were the best performers this week, while energy was the laggard.

Domestic Equity Market

Strengths

The health care sector experienced broad-based gains. Much of this was likely related to the expected Supreme Court ruling on the Affordable Care Act, commonly known as Obamacare. There will be winners and losers either way, but the fact that the uncertainty will end was likely a positive driver behind the stocks’ move.
Strength was seen in areas that generally benefit from lower oil prices, such as airlines and refiners. We also saw strength in the homebuilder group as housing data released this week was generally better than expected.
The best individual stock performer this week was First Solar, which rose 13.8 percent as the company received permitting to continue construction on a Los Angeles County power project that had been suspended in a dispute with county officials.

Weaknesses

The energy sector was hit hard as oil fell by 4.6 percent. The damage was broad based with the equipment and services segment and drillers hit the hardest. Most of the worst performers in the S&P 500 were energy names, such as EOG Resources, Hess Corp., and Cameron International.
Bed Bath & Beyond was also among the worst performers for the week as the company reported earnings and guided the current quarter below expectations. The stock fell 15.8 percent for the week after hitting an all-time high on Tuesday.
Ryder was the worst performer in the S&P 500 this week, falling 15.9 percent after the company cut its full-year earnings forecast on weaker demand.

Opportunity

With little market-moving economic data or earnings releases on the docket for next week, the focus will be on macro factors and potential government policy initiatives.

Threat