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Weekly Updates

Health Care and Utilities Slide, Energy and Financials Gain

Weekly Update – February 19, 2021

  • The S&P 500 slipped 0.7% this week, taking a breather from its recent record highs as declines led by the health care, utilities and technology sectors outweighed gains in other sectors including energy and financials.
  • The market benchmark ended the week at 3,906.71, down from last week’s record-high closing level of 3,934.83. While the index was able to reach new intraday highs this week as high as 3,950.43, its closing levels failed to top last Friday’s close. The week’s decline came in just four sessions as the US stock market was closed Monday for the Presidents’ Day holiday.
  • The decline came as the market paused from its recent runup while keeping an eye on the impacts of winter weather that led to vaccination sites being closed in areas that were crippled by power outages and slowed shipments of vaccines to other areas. In Texas, the outages also led to constraints at restaurants and supermarkets, while automakers said they were reducing output at US factories.
  • Still, the S&P 500 is up 5.2% for the month of February and up 4% for the year to date.
  • The health care sector had the largest percentage drop of the week, down 2.5%, followed by a 2% decline in utilities and a 1.9% decrease in technology. Other sectors in the red included consumer staples, communication services, real estate and consumer discretionary.
  • However, on the upside, the energy sector rose 3.1% and financials climbed 2.8%. Other sectors that rose this week included materials and industrials, up 0.9% and 0.7%, respectively.
  • In health care, shares of Henry Schein (HSIC) shed 8.2% this week as the medical products company forecast 2021 adjusted profit below analysts’ expectations. The disappointing guidance came despite the company reporting Q4 adjusted profit per share and net sales above year-earlier results and analysts’ mean estimates.
  • Among the utilities sector’s decliners, Consolidated Edison (ED) shares fell 4.1% as the company reported Q4 revenue below analysts’ expectations while the midpoint of its guidance range for 2021 adjusted earnings per share fell below the Street consensus estimate.
  • The technology sector’s decliners included Apple (AAPL), whose shares fell 4.1% this week as a report said the consumer technology company is being sued in the European Union by video game maker Epic Games over its app store payment system and control over app downloads. Epic is the developer of the popular “Fortnite” video game. Also weighing on the stock, a regulatory filing showed Berkshire Hathaway (BRK.B) trimmed its stake in Apple in the quarter ended in December.
  • On the upside, in the energy sector, shares of Devon Energy (DVN) jumped 4.3% even as the oil and gas producer reported core Q4 net income below year-earlier results and analysts’ mean estimate, as the company also boosted its oil production target for fiscal 2021.
  • The financial sector’s gainers included Cboe Holdings (CBOE), which said it plans to activate its electronic crossing auction functionality, Automated Improvement Mechanism, for S&P 500 Index options and S&P 500 Index Weekly options on its Cboe Options Exchange beginning Feb. 22. Cboe’s shares rose 7.6% on the week.
  • Next week, January leading economic indicators are set to be released Monday, followed by February’s consumer confidence index and December readings on home prices from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency. More housing data will come Wednesday with January new home sales.
  • The final two days of next week will see a flurry of economic reports. Thursday’s schedule includes weekly jobless claims, January pending home sales and January durable goods. Friday’s schedule features January personal income, consumer spending and core inflation, as well as February consumer sentiment.
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