Another record day as the Dow and the S&P 500 closed at new all-time highs. Markets got a leg up due to stronger-than-expected earnings and guidance from Dow member Home Depot, and further amplified by comments from two Federal Reserve officials that suggested that the Central Bank hasn’t yet set a course to taper its bond-buying initiatives.
The Dow Jones Industrial Average rose 53 points (0.3%) to 15,388 to register its 19th consecutive Tuesday of gains, the S&P 500 Index gained 3 points (0.2%) to 1,669, and the Nasdaq Composite added 6 points (0.2%) to 3,502.
The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leader board as biotechnology outperformed. The iShares Nasdaq Biotechnology ETF advanced 1.0%, and prevented the Nasdaq from falling too far behind the other two indices as technology displayed relative weakness.
The technology sector spent the bulk of the day in negative territory as major components failed to partake in the broader market advance. Elsewhere, the financial sector displayed strength from the start. The sector ended with a gain while JPMorgan Chase rose 1.4% after shareholders voted overwhelmingly against separating the roles of CEO and Chairman, meaning Jamie Dimon will retain both titles.
In U.S. economy news, the Philly Fed state coincident indexes showed activity in April improved in 45 states, held steady in one, and decreased in four. On a y/y basis, activity has increased in 48 states, down only in Alaska and Wyoming.
The U.S. Coincident Index increased 0.2%, in line with its historical average. Over 90% of industry leaders assessed the current U.S. economy as “fair,” and nearly 1/3 (double the previous month’s share) believe economic conditions will get better over the next six months. Retail sales were held back by adverse weather in many parts of the country and slower traffic in the aftermath of Mother’s Day shopping
Tomorrow, the Fed will likely garner the lion’s share of attention with Chairman Bernanke testifies on the outlook for the U.S. economy before the Joint Economic Committee of Congress.
Our Trend Tracking Indexes (TTIs) showed a mixed picture as the Domestic TTI gained slightly to reach +5.16% while the International TTI slipped a bit to +10.56%.
I will post the updated ETF Model Portfolios early tomorrow morning.
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