U.S. Equity Market Radar (April 30, 2012)
The S&P 500 Index rose 1.80 percent this week continuing the bounce-back that began last week. Telecom services was the best-performing sector this week along with consumer discretion and information technology. It was a very busy week for quarterly earnings reports and so far this earnings season results have been strong.
Strengths
- AT&T and Verizon powered the telecom service sector higher as both were strong this week on the back of better-than-expected earnings, driven by an increase in wireless data sales.
- The consumer discretion sector was driven by online retailers, Expedia, Amazon.com and Priceline.com. Homebuilders such as PulteGroup, Lennar and DR Horton were all up more than 7 percent this week.
- Apple was also a notable performer this week, jumping by more than five percent on very strong first quarter results.
Weaknesses
- The consumer staples sector was the worst performer and the only sector to close lower for the week. Kellogg, Safeway and Wal-Mart were all down more than five percent.
- Netflix was the worst performer in the S&P 500 this week as the company projected a slowdown in U.S. subscriber growth.
- Other weak performers for the week included Big Lots, Republic Services and MetroPCS.
Opportunity
- We are still in the middle of earnings season with key reports due from numerous benchmark heavyweights, including Pfizer, Mastercard and Allstate. Results have been generally better than expected and, once established, this trend is likely to continue.
Threat
- The U.S. remains a bright spot in the global economy but external shocks canât be ruled out.
