Index Summary
- The major market indices were mixed this week. The Dow Jones
Industrial Index rose 1.40 percent. The S&P 500 Stock Index
increased 0.60 percent, while the Nasdaq Composite fell 0.36 percent.
- Barra Growth underperformed Barra Value as Barra Value finished
0.96 percent higher while Barra Growth rose 0.31 percent. The Russell
2000 closed the week with a gain of 0.97 percent.
- The Hang Seng Composite rose 1.01 percent; Taiwan fell 3.61 percent, while the KOSPI fell 1.71 percent.
- The 10-year Treasury bond yield fell to 1.96 percent, falling 2 basis points for the week
Domestic Equity Market
The S&P 500 Index rose 0.60 percent this week, bouncing back
from the biggest weekly drop of the year last week. Defensive areas led
as utilities, staples and health care were the week’s leaders. This
was the first week of significant quarterly earnings reports. So far
the results have been mixed, with weak results from leading sectors
such as technology and consumer discretion.
Strengths
- After a long, steady run this year, the market is
witnessing a rotation as defensive areas not only outperformed this week
but also so far in April.
- Gilead Sciences was the best performer in the
S&P 500 this week, rising by more than 12 percent as the company
announced very strong results for a new hepatitis C treatment.
- Other strong performers for the week include eBay, Walgreen’s and Travelers.
Weaknesses
- The technology sector was the worst performer as
bellwether names such as Apple, Qualcomm and Google were all
down sharply for the week.
- Genworth Financial was the worst performer in the
S&P 500 this week as the company postponed plans for an IPO of an
Australian unit after the subsidiary experienced “elevated” losses.
- Other weak performers for the week included SanDisk, Chesapeake Energy and Sprint Nextel.
Opportunity
- We are right in the middle of earnings season with key
reports from numerous benchmark heavyweights including Apple,
Caterpillar and Starbucks. The early pattern has been for the
leaders to falter, but some strong reports could change that tune.
Threat
- After peaking early this month, the S&P 500 has
struggled in recent weeks and appears to be in a normal correction
phase. Sentiment appears to have run ahead of fundamentals, with
earnings season thus far having been a “sell-the-news” event.
Source:
http://www.usfunds.com/investor-resources/investor-alert/?CFID=36983&CFTOKEN=93052841
