STTG Market Recap February 5, 2013

Monday’s selling and first serious losses of 2013 was followed by a substantial rally, stopping any momentum by bears dead in their tracks.  This was the third straight session of 1% type moves in the S&P 500, each in a completely different direction.  The S&P 500 gained 1.04% and the NASDAQ 1.29%.  There was no dramatic news event to drive stocks early in the day, they simply gapped higher on the open and continued upward almost the entire session.   There was an ISM Non Manufacturing report that was mostly in line but stocks were already well on their way by the time it was released.  Earnings season continued and thus far:

With results in from more than half of the S&P 500 companies, 69% have beaten profit expectations, compared with the 62% average since 1994 and the 65% average over the past four quarters. Sixty-six percent of companies have beaten on revenue.  Fourth-quarter earnings for S&P 500 companies are expected to rise 4.5%, according to the data, above the 1.9% forecast at the start of earnings season.

The S&P 500 mostly reversed yesterday’s losses…

The NASDAQ finally had some help from Apple which helped it outperform:

Some bounce out of the largest component in the NASDAQ, but as you can see it remains in a horrible downturn.  It could bounce all the way to $500 and still not change the trend.

Financials remain among the leaders in this market, as we can see in the continued strength of JPMorgan (JPM).

Yum Brands (YUM) fell but was well off its lowest levels of the session as it recorded another disappointing quarter in China.

Yum Brands beat earnings forecasts for the fourth quarter, but shares fell after the parent company of KFC and Pizza Hut said same-store sales in its China division fell 6 percent and it now expects to post a mid-single digit earnings decline for 2013 from the prior year.

Personal care company Estee Lauder (EL) also reported and beat.

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