Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
Investors who were hoping for a bit of a sympathy bounce after yesterday’s drubbing were in for yet another rude awakening today, with the broad-based S&P 500 retreating on mixed U.S. economic data.
Once again, helping to prop up bullish sentiment was data out of the housing sector that showed that both building permits and housing starts came in well ahead of economists’ expectations. If homebuilders are ramping up production, home prices are rising, and homebuilder confidence is at a new six-year high, there’s little reason for investors in this sector to believe that a slowdown is coming anytime soon.
On the other hand, the Michigan Consumer Sentiment Index hit a sour note with investors today, coming in with a reading of 80, versus a consensus much closer to 85, and well below last month’s reading of 85.1. Don’t get me wrong… 80 is still worthy of optimism from consumers moving forward, but it does signal a somewhat quick deterioration in the high levels of optimism we witnessed in July.
By day’s end, the S&P 500 had logged its eighth loss in the past 10 sessions, finishing in the red by 5.49 points (-0.33%), and closing at 1,655.83.
On a relatively slow-moving day to the upside, driller WPX Energy Inc (NYSE:WPX) led the pack with a 2.7% gain in spite of no company-specific news. The real impetus for the move appears to be a slight rise in oil prices, and relatively steady demand for natural gas of late due to warmer summer weather across much of the country. WPX’s reserves are still very much weighted toward natural gas. as opposed to liquids, by a ratio of three to one, so it’s relying on the Obama administration’s push toward more domestic energy consumption and increased nat-gas demand to buoy prices and push its margins higher.
Credit: Anadarko Petroleum Corporation (NYSE:APC)
Finally, small tools and small diagnostic tool maker Snap-on Incorporated (NYSE:SNA) advanced 2.3%, but, like WPX Energy Inc (NYSE:WPX), it did so without any company-specific news. Snap-on did present at Jefferies Global Industrial Conference earlier this week and declared a regular $0.38 quarterly dividend earlier this month, but today’s move seems to be related more to the strength associated with U.S. housing data. A good chunk of Snap-on Incorporated (NYSE:SNA)’s market relates to small tools that homeowners and contractors would use around the house, or while building a house. Therefore, improvements in housing data could signal upcoming growth in Snap-on’s bottom line.
The article Today’s 3 Best Stocks originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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