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The market finished the last trading session before the holiday weekend in a downbeat tone. The Dow lost more than 140 points today. For the week, it was off by more than 500 points, resulting in one of the worst weeks in more than 3 months. The S&P didn’t fare much better either. It ended the session lower by 1.3% and for the week, it was off by 3.5%. There was no obvious reason behind today’s sharp sell off other than maybe some investors simply didn’t want to hold positions over the long weekend. The economic news was more or less in line with expectation. The sales of existing homes fell 1% to an annual rate of 4.89 million, bringing the inventory to sales ratio to a record high of 11.2 months supply. Meanwhile, the median price fell 8 percent from the previous month.
All 10 major sectors were in red. Transportations and commodities were underperforming the broad market. Interestingly, the latter faced some sell off despite a rise in the CRB commodity index. The US dollar was weak against most major currencies while treasuries gained some ground following the weakness in the equity market. The VIX index jumped more than 8% but remained below 20. It should be noted that historically, the day following the Memorial Day is not treating bulls very well although seasonality does point to some positive movement heading into the month end and the start of the new month. In the meantime, hope everyone enjoys a nice weekend.
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