The Week In Review


After logging four consecutive gains, the S&P 500 entered the weekend on a lower note. The benchmark average shed 0.3% while the Dow Jones Industrial Average ended flat.

Equities ended lower as two economically-sensitive sectors pressured the broader market. The notable underperformance of energy and materials was largely due to the weakness in the commodity complex.

Crude oil fell 2.8% to $90.93, and the weakness weighed on the energy sector, which ended lower by 1.3%.

Meanwhile, the materials sector was the worst performer as industrial and precious metals endured a rough session. Gold futures fell nearly 6.0% to $1488.20 while silver dropped 5.8% to $26.09. In addition, copper lost 2.8%, and settled near its 52-week low. As a result of the broad weakness in commodities, the SPDR Materials Select Sector ETF (XLB 38.74, -0.58) settled lower by 1.5%.

While energy and materials were the clear laggards, the tech space underperformed the broader market as well. Major sector components saw general weakness as Apple (AAPL 429.80, -4.53) lost 1.0%. Notably, Infosys (INFY 43.10, -11.24) plunged 20.7% after the company reported a revenue miss, and guided full-year 2014 revenue below consensus.

Interestingly, today's three weakest sectors are also the three biggest laggards of the month. Energy and materials are both down 1.4% so far in April while the technology sector is off by 0.6% month-to-date. For comparison, the S&P 500 remains higher by 1.3% in April. Meanwhile, the Russell 2000 has told a different tale so far this month. The small cap index is down 0.9% month-to-date.

Financials also finished among the laggards after JPMorgan Chase (JPM 49.01, -0.30) and Wells Fargo (WFC 37.21, -0.30) reported their first quarter results. Although both banks beat their bottom-line estimates, their revenues fell short of expectations. In addition, net income margins continued to trend lower for both.

As most cyclical sectors trailed behind the broader market, the growth-oriented consumer discretionary group ended in the lead. Discretionary stocks outperformed despite today's disappointing March retail sales report and a cautious April consumer sentiment survey from the University of Michigan.

Retailers appeared unfazed by the disappointing reports as the SPDR S&P Retail ETF (XRT 73.02, +0.05) ended with a gain of 0.1%. Today's relative strength of the retail space becomes even more impressive when factoring in yesterday's 2.0% rise in the retail ETF and the lack of a profit-taking trade today in the face of disappointing news.

Excluding discretionary stocks, other outperformers were of the defensive variety as consumer staples, health care, utilities, and telecom all settled with gains.

Today's volume surpassed yesterday's total, and finished in-line with the 200-day average as 700 million shares changed hands on the floor of the New York Stock Exchange.

Reviewing the day's economic data, February business inventories rose 0.1%, which was lower than the 0.4% increase expected by the consensus.

March retail sales declined 0.4%, while the consensus expected an unchanged reading. The prior month's reading pointed to an increase of 1.0%. Excluding autos, retail sales declined 0.4%, which was lower than the expected unchanged reading.

The preliminary University of Michigan Survey for April came in at 72.3, which was lower than the 78.6 that was posted in the prior month, and worse than the reading of 78.0 that had been expected by the consensus.

March producer prices declined 0.6%, which was cooler than the downtick of 0.1% forecast by the consensus. Core producer prices rose 0.2%, while the consensus expected an uptick of 0.1%.

On Monday, April Empire Manufacturing Survey will be reported at 8:30 ET. February net long-term TIC flows and the April NAHB Housing Market Index will be released at 9:00 ET and 10:00 ET, respectively.

Week in Review: S&P Resumes Steady Climb

Stocks spent the bulk of Monday's session in negative territory before afternoon buying lifted the major averages out of the red. As a result, the S&P 500 settled higher by 0.6%. Although stocks finished with gains, leadership was mixed, suggesting a certain level of indecision was present among market participants. Both consumer sectors ended ahead of the broader market with the defensively-oriented staples in the lead. Coca-Cola (KO 41.08, -0.10) rose 2.0% and Philip Morris (PM 96.44, +0.84) advanced 1.9%.

On Tuesday, equities settled just off their best levels of the session with the S&P 500 gaining 0.4%. After opening on a higher note, stocks alternated between gains and losses until afternoon action sent the major indices to their highs. Steelmakers rallied across the board as the Market Vectors Steel ETF (SLX 42.25, -0.44) surged 3.4% to record its second largest one-day advance of the year.

Wednesday saw the S&P 500 rise 1.2% as technology, health care, and industrials outperformed the broader market. Notably, the Dow Jones Transportation Average stood out with a gain of 1.8%. On the downside, homebuilders sat out the broad market rally as Taylor Morrison Home Corporation (TMHC 24.30, +0.29) made its debut as a publically traded company.

On Thursday, the S&P 500 rose 0.4%, but technology stocks did not participate in the advance. The sector was under pressure after the International Data Corporation indicated first-quarter PC shipments plunged 14%. This marked the largest decline on record since IDC began tracking shipments in 1994, and pressured major tech names. Hewlett-Packard (HPQ 20.90, +0.02) fell 6.5% while Intel (INTC 21.68, -0.15) and Microsoft (MSFT 28.79, -0.14) settled with respective losses of 2.0% and 4.4%.