Credit: Shutterstock photoStocks continue their pullback from record highs this morning as investors await the start of earnings season and take profits overseas.
S&P 500 futures are off 0.1 percent. Europe is down across the board, led by higher-risk countries such as Italy and Spain. There was also significant profit-taking in Mumbai overnight, which drove India's Sensex down 2 percent. Most other Asian markets were little-changed.
The S&P 500 has posted record closing highs in 14 of the last 29 sessions, fueled by widening optimism about the U.S. economy. But former leadership areas including small caps and transportation have lagged in recent weeks. Europe has also fallen behind emerging markets as growth slows. Today, for instance, industrial production unexpected slowed in regional stalwart Britain.
Attention now focuses on corporate quarterly reports, which begin as a trickle this week and turn into a deluge by late July. Alcoa gets the ball rolling this afternoon. Retailers announce monthly same-store sales Thursday and Wells Fargo reports Friday morning. Other major banks follow next week. The World Cup also concludes on Sunday, so trading volumes could increase.
While some areas have weakened, our researchLAB market-analysis tool shows that investors have turned to new groups. Basic metals such as iron ore and copper miners have shined in the last two weeks following a long period of underperformance. Media stocks, retailers, and homebuilders have emerged as new favorites as well. Former technology favorites such as Apple, Seagate Technology, and Google have also started to work.
In company-specific news, SeaDrill dropped 4 percent after announcing a convertible-bond offering. British drug maker Shire is also likely to be active after AbbVie raised its takeover offer for the firm.
Commodities continue a recent pattern of metals climbing as energy lags. Copper is up 0.3 percent this morning, silver is gaining 0.9 percent, and gold is rising 0.5 percent. Oil is fractionally lower.
The Australian dollar, which tends to follow copper, is also higher. Other price action in foreign-exchange markets is negative for equities as the euro weakens and the safe-haven Japanese yen inches higher.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
