Oil explorers and producers ETFs led the stock market south
Tuesday asFedEx (
) delivered disappointing first-quarter results and lowered its
full-year outlook. The U.S. economic bellwether and world's
largest airline-cargo shipper said weak global economic
conditions hurt sales as customers opted for cheaper shipping
SPDR S&P Oil & Gas Exploration &
), one of last week's leaders, fell 2.81%. It looks like a
healthy dip after last week's 4.25% vertical surge. It's rallied
7.76% so far this month vs. 3.69% for the S&P 500.
Energy Select Sector SPDR (
) shed 1.17%. It's ahead nearly 5% month to date.
United States Oil (
), the largest ETF trading oil futures, fell 0.0.8%. Crude oil
fell 0.83% to $95.82 a barrel.
"FedEx underscores the reality of the economy weakening and
that takes momentum out of the oil market," said Kimberly DuBord,
director of research at Briefing Research in Chicago. "The world
is slowing. We continue to have more economic data showing more
of that taking place, especially in China -- a big consumer of
Fears of inflation from QE3 and potential supply disruption
from conflict in the Middle East has already been priced into the
market and now traders are booking profits, DuBord added.
"Energy as a sector represents a buying opportunity for
investors depending on their existing exposure and risk
tolerance," said Mark Martiak, senior vice president at Premier
Wealth Management in New York City.
U.S. Markets Mixed
In afternoon trade,
SPDR S&P 500
) shed 0.19%.
PowerShares QQQ (QQQ), tracking the 100 largest non-financial
stocks on the Nasdaq, -0.09%, was nearly flat.
SPDR Dow Jones Industrial Average (DIA), -0.04%, regained most
of its early morning losses.
The market is pulling back from overbought conditions brought
on by the Federal Reserve's quantitative easing announcement the
"This is natural, and to be expected, and it ought to have
another day or two to run until the rubber band gets unstretched
again," Tom McClellan wrote in his daily client note. "Once that
happens, the uptrend should proceed again."
The Nasdaq can top 3,200 (up slightly from Tuesday's level)
led byApple (AAPL) hitting $750 a share andGoogle (GOOG) $740,
says Gennady Kupershteyn, managing partner of Kupershteyn
Advisory Group in New Jersey.
"But with more and more of the early-leading stocks are
topping even as the stock market has made a new high and economic
reports indicating a poor earnings season to come, there is now a
high probability that we will begin to see the market enter a
topping process going into earnings season," Kupershteyn
Those leading stocks includeAlexion Pharmaceuticals
(ALXN),Equinix (EQIX),Mellanox Technologies (MLNX) and many
others on the IBD 50 list.
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