Stocks pulled back Thursday in orderly fashion as they began to work off a very short term overbought condition. The S&P 500 fell 0.34% and the NASDAQ 0.24% but the damage was a bit more widespread as the advance decline was >-1000 which normally is closer to a day when the indexes would be down over half a percent. Economic data showed first time weekly claims for state unemployment benefits fell to the lowest level since 2006, but the picture was incomplete because two states did not process all their claims. Precious metals were hit hard as tensions in the middle east continue to lessen, and investors look ahead to a potential slowdown of quantitative easing at next week's Fed meeting.
No damage done in the indexes - this was a necessary rest. A few more days of this would bode well for a new leg up.
Breadth was pretty bad today actually, far worse than the indexes would lead you to believe.
Here are the precious metals which took a beating.
As did yoga apparel maker Lululemon (LULU) after its earnings report. You can see it has now had 2 reports the market has not liked and unlike strong stocks which quickly bounce back from 1 bad report, it more or less just spun sideways for a few months.
Premium yogawear retailer Lululemon Athletica Inc (LULU), still recovering from an embarrassing recall of excessively see-through yoga pants, trimmed its outlook for full-year sales and profits on Thursday, sending its shares lower. For the 2013 fiscal year, which ends in February, Lululemon expects net revenue of $1.625 billion to $1.635 billion, down from $1.645 billion to $1.665 billion previously forecast. The company trimmed its forecast for full-year earnings per share to $1.94 to $1.97, from $1.96 to $2.01. Lululemon, said net income fell to $56.5 million, or 39 cents per share in the second quarter from $57.2 million, or 39 cents per share, a year earlier. Analysts had been expecting earnings of 35 cents a share, according to Thomson Reuters I/B/E/S. Net revenue rose 22 percent to $344.5 million, on the high end of Lululemon's guidance. This compared to analysts' forecast of $343 million. Comparable store sales rose 8 percent for the quarter on a constant dollar basis.
Lululemon said it expected mid single-digit comparable-store sales growth during the third quarter. That is down from the company's heyday, when sales rose 10 percent and more from one quarter to another. The third quarter was off to a weak start due to late deliveries of autumn products, a hangover from the disruption caused by the recall of its Luon pants, the company's signature item, Lululemon said during a conference call with analysts.
On the positive side, MasterCard (MA) has been on a tear of late - short term it is overbought.
It is also worth noting the biotech sector, which continues to be the star of 2013.