U.S. Equity Market Radar (December 3, 2012)
The S&P 500 Index followed up last weekās strong gains with another positive week. Utilities bounced back after dividend-related stocks took a hit earlier in the month.
Strengths
- Utilities rallied across the board this week as fears over dividend-tax changes abated somewhat. The sector was the worst performer month-to-date going into this week.
- The construction materials industry group was the best performer this week driven by optimism regarding the housing rebound.
- Monster Beverage was the best-performing stock in the S&P 500 this week, up 13.30 percent. The stock had been under pressure in recent weeks on concerns of additional regulatory scrutiny from the FDA on the safety of energy drinks. This week the FDA stated that it is not planning any immediate actions on the issue and the prior fears of a crackdown may have been overblown.
Weaknesses
- The energy sector was the worst performer this week as natural gas declined by more than 8 percent, driving many of the exploration & production stocks lower.
- The financial sector also underperformed in mixed trading, making it somewhat difficult to identify a specific theme or trend this week.
- VeriSign was the worst-performing stock in the S&P 500 this week, down 16.5 percent. The U.S. Department of Commerce approved a contract with the website registry company that maintained pricing but eliminated price increases that many investors had expected.
Opportunity
- The market was able to rally even as the fiscal cliff news turned negative, giving hope the market may resume its historical seasonal strength into year end.
Threat
- There was lots of economic data noise due to hurricane Sandy that will likely depress reported economic results for November.
