SPX continues to new highs as lagging sectors play catch-up

The S&P 500 hit a new record high for the third straight week as investors rotated into sectors that lagged earlier in the rally.

Utilities, real estate investment trusts and consumer staples were the market’s top gainers in the holiday-shortened week between February 21 and February 24. However, several technology names continued to advance amid strong earnings and signs of better industry conditions.

Computer-maker HP (NYSE: HPQ), for instance, was the S&P 500’s top performer with an 11percent gain after results suggested that businesses are finally investing in new PCs. First Solar (NASDAQ: FSLR), rose 9 percent, ranking second in the index after profit and revenue beat estimates. 

The S&P 500 closed at 2367, up 0.7 percent from the previous Friday. Last week was also noteworthy because the Dow Jones Transportation Average and the Russell 2000 index of smaller companies ended lower and continued to underperform the broader market. That marks a shift in sentiment away from businesses usually associated with strong domestic growth.

Energy slid more than 1 percent, making it the worst major sector, amid worries that growing domestic-oil production will offset reduced pumping in countries like Saudi Arabia and Russia. Natural-gas stocks like Range Resources (NYSE: RRC) and Southwestern Energy (NYSE: SWN) also fell on poor results and predictions by meteorologists of an early spring.

The S&P 500’s biggest decliner was retail stock L Brands (NYSE: LB), which tested areas last seen in April 2013. The parent of Victoria’s Secret and Bath & Body Works reported another weak quarter as store traffic slowed and management revamped merchandise. TripAdvisor (NASDAQ: TRIP) was the only other member of the index to make a new 52-week low, continuing its slide after revenue lagged estimates on Feb. 15.

Last week the economic agenda was relatively quiet, with mixed housing data and minutes from the Federal Reserve’s last meeting suggesting interest-rate hikes may come sooner than expected. The forward calendar is busier, with durable-goods orders and pending home sales today, followed tomorrow by revised fourth-quarter gross domestic product and consumer confidence. There are also several Federal Reserve speakers and the Institute for Supply Management’s manufacturing index. Non-farm payrolls, normally reported the first Friday of each month, are pushed to March 10.