The Standard and Poors 500 Index (S&P 500) fell 11.91 points (0.6%) on Friday to end the week at 1,985.54 and failing to maintain the psychological 2,000 point level it had inched across in previous weeks. The index was down 22.17 points (1.1%) for the entire week.
The Dow Jones industrial average decreased 61.49 points (0.36%) on Friday, ending the week at 16,987.51. Much like the S&P 500, the Dow failed to maintain the psychological 17,000 point level it had recently risen above. For the week, the Dow ended down 149.82 points (0.9%).
The Nasdaq composite made it a clean sweep of decreases for the major stock indexes as it fell 24.21 points (0.53%) on Friday to 4,567.60 points. That was a decrease of 15.30 points (0.3%) for the week.
Energy stocks took a big hit during the week, falling 3.7% on falling oil prices. On Friday alone, Exxon Mobile fell 1.3% while Conoco Phillips was down 1.2%. While the decrease in oil prices is bad news for oil stocks, consumers are seeing lower gas prices. After hitting a high of about $3.70 a gallon during the summer, the average gas price has fallen steadily, and some people are speculating it may even find its way to $3.00 a gallon in the not too distant future.
Another sector that had a bad week were the S&P utilities, which decreased 1.8% on Friday. Utilities are a place where traders often seek shelter when bond yields weaken due to the high dividends many of them pay. This week those traders did the opposite as US bond yields had their largest increase during the week in more than a year.
There’s also growing speculation among traders that the Federal Reserve is inching toward raising interest rates at a quicker pace than previously speculated. This came from retail sales and consumer confidence data released on Friday. As the economy gains strength, the likelihood of a raise in interest rates increases, making borrowing for companies more expensive. A Fed policy meeting next week should show whether or not these current fears are founded or not.
(Photo courtesy of Alan Kotok)