Investors can only huff and puff so much before the weight of economic data can no longer support an insanely powerful rally in the broad-based S&P 500 (^GSPC 1.05%). Today, a combination of existing-home sales data and testimony from Federal Reserve Chairman Ben Bernanke were enough to spook the markets well into the red.
Existing-home sales for April edged higher by 0.6% from March to a seasonally adjusted annual rate of 4.97 million. While these are the highest levels we've witnessed since late 2009, it was ever-so-slightly weaker than many economists' forecasts. A rebound in housing is crucial to the economic recovery, with loan growth driving banks' bottom lines and many underwater homeowners seeing prices finally rising to the point where they can refinance.
Similarly, Fed Chairman Ben Bernanke's comments, which were basically the same thing he's been saying for months -- that the Fed could reduce its bond-buying stimulus if the economic data supported it -- scared investors. At the heart of their fears are concerns that an end to the bond-buying program could boost interest rates, which would lead to a rapid decline in loan activity and the economy.
When all was said and done, the S&P 500 retraced 13.81 points (-0.83%) to close at 1,655.35. Even though stocks certainly took a tumble today, these three companies within the S&P 500 easily bucked the trend.
Leading the charge higher despite no company-specific news was infant formula maker Mead Johnson Nutrition (MJN), which gained 6.3%. While today's move appears based more on excited technical trading than anything else, Mead Johnson does supply a consumer product that isn't likely to fluctuate in demand if the economy is contracting. Companies like Mead Johnson, which make what I'd refer to as a basic need item, have strong pricing power and typically pay reasonable dividends. Mead certainly isn't inexpensive at its current levels, but I would think twice before betting against it as well.
Following Mead Johnson higher was large drugmaker Bristol-Myers Squibb (BMY 0.95%), which rose 5.3% after a price target increase by Citigroup (C 0.89%) from $33 to $55. The timing is a little comical, with Bristol closing at $45 yesterday (a little late there, Citi!), but Citi ultimately believes Bristol will be able to grow revenue by 10% between 2014 and 2019 and EPS by 17% per year over that same period. What's interesting about Citi's analysis is that they're not sure which pipeline candidates will lead Bristol to success, but they're fairly certain Bristol will be successful. I'm not a big fan of close-your-eyes-and-cross-your-fingers investing, so I'm more than happy keeping my distance from Bristol at these levels.
Finally, independent oil and natural gas company Pioneer Natural Resources (PXD -3.44%) rose 3.3% following an announcement that it had begun production of the company's first horizontal well in the Wolfcamp Shale region of Texas. Initial 24-hour production delivered 1,572 barrels of oil-equivalent production, of which 77% was oil. The Wolfcamp Shale region is rich with liquid assets, which are sure to provide Pioneer with beefier margins and less volatility than gas-rich assets. Like the previously mentioned top stocks today, Pioneer is a bit pricey on a forward earnings basis, but if it can continue to find liquid-rich assets it could certainly be worth more.
