U.S. Equity Market Radar (March 11, 2013)

U.S. Equity Market Radar (March 11, 2013)

The S&P 500 powered ahead this week bolstered by improving economic data. Cyclical sectors led the way with gains of more than 2 percent. Financials were also strong on the back of the Federal Reserve’s stress test that boosted investors’ confidence.

Strengths

• Financials were the best performing sector this week rising by 3.39 percent as investors cheered on the news of the relatively strong showing of the largest banks in the country passing the Fed’s annual stress test. Citigroup was one of the biggest beneficiaries rising 10.85 percent.
• Consumer discretion was also strong this week, rising by more than 3 percent. The housing stocks bounced back this week with DR Horton and Lennar both rising about 7 percent.
• Best Buy was the best performer in the consumer discretion sector as well as the S&P 500 this week rising 17.54 percent. The company reported earnings last Friday that beat fourth-quarter estimates and the stock followed through by rising every day this week.

Weaknesses

• Every sector in the S&P 500 rose by at least 1 percent this week, so weaknesses are relative.
• Intuitive Surgical fell 7 percent this week following last week’s announcement of an FDA probe into the firm’s da Vinci surgery system.
• J.C. Penney was the worst performer in the S&P 500 this week falling 14.58 percent. The company’s continued troubled turnaround has prompted sells from strategic holders, a lawsuit with Macy’s and analysts’ downgrades that were just too much this week.

Opportunity

• The market continues to climb a wall of worry and is shrugging off any bad news. It may be a sign that investors’ confidence has returned and will propel the market higher.

Threat

• A market consolidation wouldn’t be a surprise after a strong start to the year.