The S&P 500 suffered its worst losses of the year, falling by more than 2 percent this week. A combination of factors was the likely culprit. Chinese GDP growth disappointed in the first quarter, with investors remaining skeptical that China will be able to grow as fast as expected for 2013 with a relatively slow start to the year. Gold sold off sharply on Monday after a big drop on Friday in what appeared to be a market dislocation that was difficult for even seasoned investors in the space to explain. This sharp selloff in gold spilled over to other markets as investors feared it was a precursor to financial market volatility to come. Defensive groups outperformed, while more cyclical areas were hit the hardest.
Strengths
- The telecommunication services sector was the leader this week as Sprint Nextel rose by more than 15 percent on a takeout offer from Dish Network.
- The utility sector also outperformed as investors appreciated the stability and dividends that utilities offer.
- Sprint Nextel was the best performer this week as discussed above but Life Technologies rose by more than 8 percent on a takeout offer from Thermo Fisher Scientific. (more)
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