Market Overview

Defensive Issues Not Participating In The Market's Rally

Defensive Issues Not Participating In The Market's Rally
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As the market attempts to clear important resistance levels in Thursday's session, not all issues have participated in the rally.

The decline in Wednesday's session gave investors that missed out on the recent explosive rally a glimmer of hope for a pullback. Once again, geopolitical events took center stage as a shooting at the Canadian parliament riled the markets. The incident prompted NORAD to increase its alert posture, as it has increased the number of planes on a higher alert status ready to respond, if needed.

With no new developments overnight, along with a few solid earnings reports, the indexes responded and were flirting with the highs of its two previous sessions. After a brief pullback off the open, the indexes were once again heading higher.

Related Link: Can Netflix Rebound? Mark Cuban Thinks So

Defensive Issues Not Participating After Slight Earnings Misses

However, a few defensive names have not taken part in the rally. Procter & Gamble Co (NYSE: PG), AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) are in the red.

The reason for AT&T's decline is the result of a slight earnings miss. After Wednesday's close, it missed third quarter expectations by $0.01 while revenue grew 2.5 percent, in line with expectations. Despite reaffirming its 2014 revenue forecast of 3 to 4 percent, it has been punished in Thursday's session. At time of publication, it was trading lower by $1 (2.9 percent) at $33.49.

If the decline continues, AT&T could be back at its lows from last week at $33.25.

Verizon also missed Q3 estimates by $0.01, but is not being punished as much as AT&T. After declining from its Wednesday close ($48.31) to $47.85, it has recovered back over $48.00. Investors could be influenced by AT&T's revenue misses in the last two quarters, as opposed to Verizon, which topped revenue estimates over the same time period.

Mysterious Decline In Procter & Gamble

The reason for Procter & Gamble's sharp decline is not as apparent.

After opening flat and totally ignoring the rise the in the indexes, it collapsed. It cascaded nearly $2.00 to $82.30 before rebounding to its current level ($82.90). Fair value players may have bought aggressively off the open, figuring they were getting a bargain opening price that was theoretically undervalued. When a rally failed to materialize and aggressive shorts began to feast on its prey, the bottom fell out.

Another possible factor for Procter & Gamble's fall may have been the announcement of the retirement of a key executive. Late Wednesday, Melanie Healey (president of North America operations), whom many as viewed as a successor to CEO A.G. Laffey, said she will retire next June.

Toward the end of Thursday's trading session, all three issues were still in the red.

Tune in every morning, Monday-Friday, from 8-9:45 AM EST to hear Joel Elconin and Dennis Dick discuss what's moving the markets and why on Benzinga's #PreMarket Prep.

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