Sector Week-in-Review: Market Takes a Breather

Last week the market surged after the FOMC cut interest rates. This week we find more muted action as most of the ETFs on my list stayed near breakeven for the period (click to enlarge):

Returns were evenly split between gainers and losers. Just over half the funds on my spreadsheet, 55%, showed a gain and the distribution of big moves was balanced, once you look past housing. The SPDR Homebuilders ETF (XHB) showed an outsized move relative to other areas as it plunged 8%.

Last week, I noted that the SPDR Homebuilders ETF showed a strong rally immediately after the rate cut but saw those gains vanished as the week wore on, leaving the XHB with a slight loss on the week. The XHB hit a new low this week, fueled in part by the 3Q loss reported by Lennar (LEN).

Looking outside the housing stock woes, it was a mostly quiet week for the market as most sectors showed moves that didn't exceed two percent. The US Oil Fund (USO), Wireless HOLDRS (WMH), and PowerShares Aerospace & Defense (PPA) led while the iShares DJ Select Dividend (DVY) and PowerShares Energy Exploration & Production (PXE) joined the XHB on the downside.

While the small moves may make for a somewhat boring week, I don't think that is necessarily a bad sign. We saw a strong rally last week and the relatively subdued action this week means the market "kept" those gains.

Index performance this week:

Index performance year to date:

Comments

[Uncle Bill]

No alpha help here.