Dow and S&P 500 End Week at Record Highs. Will We See More Next Week?

The stock market ended last week in positive territory with the Dow Jones industrial average and Standard & Poor’s 500 index both reaching new record highs. The Dow is up 2.2% for the year and ended the week at 16,947.08, breaking the previous record of 16,945.92 set on June 10, 2014. The S&P 500 is up 6.2% for the year, ending the week at 1,962.87, reaching its highest level for the third day in a row. The NASDAQ Composite, while not reaching an all-time high, managed to end the week at 4,360.04, its highest level in 14 years. The question is, will stocks continue to hit record highs in the week to come?

There are a couple of key areas which may play a large part in determining whether or not stocks continued to climb in the week ahead. First, the street will get to see reports from a couple of consumer discretionary stocks. Their results could be important, as this is the only sector of the S&P 500 which remains negative (down 1.1%) since the beginning of the year. This coming week, retailer Bed Bath and Beyond and sports apparel maker Nike will both report results. Their earnings could be a large factor in how the stock market as a whole does for the week.

Housing data will also probably play a key role on how the market does in the coming week. Monday we’ll see data released on the sales of previously owned US homes. The National Association of Realtors will be releasing this data early Monday morning. On Tuesday morning, the Commerce Department will be releasing data on new home sales in the US. Whether or not this data meets the stock markets expectations will likely have a large influence on if we see another week of record high stock market closes.

Ultimately, however, new records highs for the S&P 500 index and Dow may not have anything to do with new data releases in the US. The weekend has made the likelihood of geopolitical unrest being a major stock market influence more likely. Where the stock market ultimately ends could very well be determined by what happens in Iraq over the next week. With an escalation of fighting over the weekend, and the nation on the verge of an all-out civil war, the unrest and geopolitical problems there could easily trump all of the news and data coming from the US. An uptick in geopolitical problems in the Ukraine could also have the same effect.

(Photo courtesy of Tripp)