Following a two-month rally, in which the Nasdaq Comp and Russell 2000 were up nine straight weeks and the S&P 500 and Dow were up eight out of nine, the major averages finally saw profit taking this week. Despite being an options expiration week, things slowed down considerably as the bank stress test results have been released, first quarter earnings season has wound down and summer is fast approaching.
All four of the major averages ended the week lower, but the Russell underperformed, falling 7.0%. The S&P was next in line, down 5.0%, followed by the Dow at -3.6% and the Nasdaq at -3.4%. Among sectors, Financials led the way, declining 12.1%, which is fitting as the sector outperformed during the rally, particularly last week when surged 23% on the bank stress test results. It wasn't the only sector to see sizable declines, though, as Industrials lost 7.6%, Consumer Discretionary fell 7.3% and Energy decreased 6.8%. All ten sectors that make up the S&P 500 ended in negative territory this week.