SPX moved to new highs as positive news flowed in
02/21/17

The S&P 500 continued to new highs last week as buyers sought value in healthcare and returned to financials.

Six of the index’s 10 best performers were members of the SPDR Health Care ETF (NYSE ARCA: XLV), potentially marking a shift in sentiment in 2016’s worst sector-tracking portfolio. The relative strength followed reports of interest by major value investors and hopes of a more favorable political backdrop. Interestingly, some of the top gainers like pharmaceutical company Endo International (NASDAQ: ENDP) and health-record firm Cerner (NASDAQ: CERN) advanced, despite a lack of clearly positive news.

Strong economic data remained a dominant theme last week, with January retail sales beating estimates and the Commerce Department almost doubling its total for the key month of December. Federal Reserve Chair Janet Yellen suggested interest rates need to rise as inflation accelerates, while manufacturing surveys by the central bank’s New York and Philadelphia branches crushed forecasts.

Buyers responded by piling into banks, brokers, and money managers, which typically benefit from higher interest rates and stronger economic confidence.

In total, the S&P 500 rose 1.5 percent to 2351, remaining above the key 2300 level it broke earlier in the month. It’s advanced for seven straight weeks, the longest such run since April 2016. Other key benchmarks including the Dow Jones Industrial Average, Nasdaq Composite, and Russell 2000 also achieved new highs.

The best single performer in the S&P 500 was the relatively obscure trash hauler Stericycle (NASDAQ: SRCL), which surged 11 percent after earnings beat forecasts. TripAdvisor (NASDAQ: TRIP) led to the downside, sliding 9.5 percent on the heels of a weak quarterly report.

Only four companies hit 52-week lows, but each has exposure to the brick-and-mortar retail. L Brands (NYSE: LB), the parent of Victoria’s Secret, and watch seller Fossil (NASDAQ: FOSL) are both traditional merchants, while Macerich (NYSE: MAC) and Kimco Realty (NYSE: KIM) operate shopping centers.

This week is relatively quiet following the Presidents' Day holiday, with minutes from the last Fed meeting and existing home sales on Wednesday and new-homes data Friday. The earnings lineup mostly focuses on retailers like Wal-Mart (NYSE: WMT) and Home Depot (NYSE: HD).