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US Stocks Fail to Secure Wall Street Gain for Sixth Week in a Row

September 13, 2014 By Jeffrey Strain Leave a Comment

US stock indexes deacrease for first time in six weeks

The winning streak couldn’t last forever, and US stocks finally hit a small speed bump on Friday and closed lower for the first time after five weeks of gains and record highs. The good news is that the retreat in stock prices looked more like a short rest from the record highs rather than a full on retreat, falling mainly due to some weakness in energy shares and raising bond shares hitting stocks which pay high dividends.

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)

S&P 500 Ends Week at Another Record High with Gains for Fifth Week in a Row

September 6, 2014 By Jeffrey Strain 5 Comments

The S&P 500 ends week at another record high

It was another good week for stocks with the Standard and Poors 500 (S&P 500) closing at its highest level ever once again. The rise was spurred by a jobs report which came in weaker that most analysts anticipated. This news was taken by investors as indicating the Federal Reserve will hold off on raising interest rates for the foreseeable future to continue to help the economy. The weak jobs report gives ammunition to those who say the economy is still struggling and interest rates should remain low to help it.

The S&P 500 was up 10.06 points (0.5%) for the day ending up above the 2,000 mark again, at 2,007.71. This was a 0.2% gain for the week. The 2,000 point level, while not having any significant economic meaning for the index, continues to have a strong psychological meaning to many traders. The S&P 500 is still struggling to maintain closings above this level on a daily basis, but it may be able to do so in the weeks to come as it continues to slowly end each week a bit higher than the previous week. This is the fifth week in a row the S&P 500 has managed to end higher than the week before.

The Dow Jones industrial average ended the day up 67.78 (0.4%) points to 17,137.36, and managed a 0.2% gain for the week. The Dow helped to solidify its position above the 17,000 mark this week and looks like it should maintain this level in the weeks to come, baring any unexpected geopolitical unrest which spooks investors.

The Nasdaq Composite increased in value by 20.61 points (0.45%) on Friday to 4.582.90, an increase of 0.06% for the week. While the Nasdaq continues to remain well below its all-time high during the dot com bubble, it continues to inch its way back toward the 5,000 mark ,week by week.

Utilities had a good day with a 1.2% gain as investors found them appealing after payroll release numbers had bond yields falling. Utilities, with their strong dividends, are a place of refuge for many investors when bond yields fall.

Apple ended Friday up 0.9% to $98.97. After breaking $100 a share, the stock has been unable to remain above that mark. Rumors continue to abound about what will be announced at their much anticipated September 9 news conference and if the new products can meet investors’ expectations. The stock was also hit when their iCloud was rumored to be part of the issue on how the celebrity nude photos ended up being hacked, although they have denied there was a breach in this area. They have also announced they plan to add new iCloud security features.

Family Dollar Stores decreased 1.2% to $79.11 after rejecting a new and sweeter offer from Dollar General in the battle between dollar stores. The rejection also hurt Dollar General shares which fell 2.3% to $63.01.

(Photo courtesy of ilaria)

Dow Sees Biggest Decline in Six Weeks as S&P 500 Fails to Extend Record Closes

July 26, 2014 By Jeffrey Strain 3 Comments

Dow closes with biggest weekly decline in 6 weeks

The week for stocks looked so promising through Thursday, but Friday brought about a sour note, leaving stocks lower for the Dow than where it began for the week, and erasing record highs the S&P 500 had been achieving during the week. The Friday decline managed to thwart the chance for indexes to end at another week of record highs.

The S&P 500 index has squeezed out three record days in a row from Tuesday through Thursday, but investors found negatives in a number of areas on Friday that wiped out all the gains made during the week. The S&P 500 had been flirting with 2,000 all week, but failed to ultimately make it there. The index was down 9.6 points for the day (-0.48%) ending at 1,978.34 for the week, which was approximately where it had started for the week.

The Dow Jones Industrial Average saw its average dip below the key 17,000 mark once again as a series of disappointing earnings came in on Friday. The result was the largest weekly decline in a month and a half, leaving it down 123.23 points (-0.72%) for the day at 16,960.57. For the entire week, the Dow fell 0.8%, a decline it hadn’t seen since the middle of June.

The NASDAQ Composite closed 22.5 points lower on Friday (-0.50%) at 4,449.56. This actually was a small gain overall for the week of 0.4%, buy still far below the record high of over 5,000 achieved during the dotcom bubble.

Amazon set the tone for the day by disappointing investors by posting a second-quarter loss in excess of what investors had expected. The stock was down almost 10% for the day, and it was a big contributor in the S&P 500 failing to end the week at another record high. Visa was another disappointment on Friday, losing 3.8% of its value when it announced a smaller annual growth forecast.

One bright spot on the day was El Pollo Loco. On the first day of trading, the stock rose 60% in value to $24 a share, well above the $15 a share price of the initial public offering.

The week ahead offers a variety of economic news which will determine whether or not the markets can rebound from Friday and look to reach record highs again. The monthly jobs report will be released, and there could be news out of the Federal Open Market Committee meeting which could determine the direction stocks for the week.

(Photo courtesy of George Rex)

Dow Tops 17,000 and S&P 500 Hits Record High in Short Week of Trading

July 4, 2014 By Jeffrey Strain Leave a Comment

Dow Jones industrial average and S&P 500 index end week at record highs

A short week for stocks couldn’t dampen trader’s spirits as both the Dow Jones industrial average and S&P 500 index hit new all-time highs in the week leading up to the Fourth of July. With stock markets taking a break to celebrate Independence Day on Friday, the Dow managed to top 17,000 for the first time ever for the last trading day this week, spurred to new heights by a June jobs report that came in stronger than expected. Stocks managed to add an extra $200 billion to their worth during the week.

The Dow ended the day up 22.02 points for a 0.54% gain. That left the Dow at a record 17,068.26 when trading ended, and a 1.3% gain from 16,851.84 points where it ended last week. It took it less than a year (227 days) to reach the milestone from when it sat at 16,000 points. It was the third day in the row the Dow managed to reach a record high. Even as it surpassed the 17,000 point mark, the Dow is actually under-performing both the S&P 500 and NASDAQ for the year. It’s up 3% since January, but both the S&P 500 and NASDAQ have managed gains of over 7% during the same time period.

The S&P 500 rose 10.82 points for a 0.55% gain for the day. It’s quickly approaching the 2,000 point mark, and ended the week at 1,985.44. That was a 1.25% gain for the week, and also the third straight record high for the index.

The NASDAQ Composite didn’t reach an all-time high, something we’re not likely to see for some time, due to the soaring heights when it closed above 5,000 during the dot-com bubble. It was up 28.19 points for the day for a 0.63% increase, for the highest level it’s been in 14 years. That left it at 4485.93 as the session ended, and 2% up for the week. Although it didn’t manage to reach a record high, the NASDAQ has managed to post a gain for seven out of the last eight weeks, and is up over 10% over the last two months.

The last day of the week the stock rally came primarily due to a jobs report for June which came in stronger than expected. Economists had expected a gain of 212,000 jobs for the month, but the economy actually added 288,000 in June. At the same time, the US unemployment rate hit its lowest level since September 2008 as it decreased to 6.1%. Both numbers encourage traders to see the US economy a solid foundation in place for strong US economic expansion in the second quarter, after a subpar start to the year.

(Photo courtesy of Dan Nelson)

Asian Shares Creep Higher, While Home Sales Fail to Spark US Stock Market

June 23, 2014 By Jeffrey Strain Leave a Comment

Better news from China, Japan and the US from performance of manufacturing surveys (PMI) data helped Asian stocks find slender gains on Tuesday. This included a US PMI which reached a four-year high of 57.5. The improvement in manufacturing indicated global growth even with less than stellar data coming from euro zone.

Even with the data, the movements were modest, with only a 0.3% gain for the MSCI’s broadest index of Asia-Pacific shares outside Japan. South Korea was able to outperform the region by gaining nearly 1% with the help of Samsung Electronics and Hyundai Motors. The Nikkei didn’t fare as well, as it lost 0.36%.

The US stock market basically remained flat on Monday despite the PMI news and better than expected news about existing home sales. Last week had seen both the Dow Jones industrial average and S&P 500 index both reach record highs on Friday, and the housing news today was supposed to be one of the factors to determine how well the stock market would do this week. US existing home sales for May ended up increasing more than two times what was expected, but that alone was unable to spark even a tiny increase in the stock market.

Both the Dow and S&P 500 had tiny losses, while the NASDAQ Composite squeaked out a gain. The Dow ended at 16,937.26, a 9.82 point drop from the record close on Friday, and a loss of 0.06%. The S&P 500 stood at 1,962.61 at the close of Monday, a loss of 0.26 points or 0.01%. The NASDAQ Composite closed 0.64 points higher than Friday at 4,368.68 points, or a 0.01% gain. While not a record high, it was still the highest close in 14 years.

While the housing news was expected to be the big news of the day, it ended up being energy company merger activity which produced the strongest action, and the group which had the largest percentage gain for the S&P 500 for the day with a 0.04% increase. This was precipitated with the news Wisconsin Energy had agreed to purchase Integrys Energy Group in a $9.1 billion deal. Integrys was up double digits at 12.1% to $68.35. That ended up being the top S&P 500 percentage gainer for the day. Wisconsin Energy ended up falling 3.5% to $45.27.

On the other side of the coin, it was companies like General Electric which declined 1.1% to $26.86 and Boeing fell 0.9% to $130.85 which kept the Dow from seeing positive territory for the day. Some other notable stocks for the day:

Oracle agreed to purchase Micros Systems, which saw both stocks gain. Oracle was up 0.7% to $41.10 while Micros Systems gained 3.4% to $67.98. The deal is said to be worth $5.3 billion.
ParkerVision tumbled 63% to $1.85 on news that a federal judge overturned a $173 million patent infringement verdict against Qualcomm.
The announcement of third-quarter results by Micron Technology in after-hours trading produced little change to the stock.

It’s still anyone’s guess where the stock market will end up at the end of this week, and Monday didn’t give any indication on where traders are likely to push it. It seems traders are satisfied to wait for more economic data to come in during the week before making any big decisions, instead focusing on individual stocks and the specific news around them.

(Photo courtesy of Iman Mosaad)

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

June 22, 2014 By Jeffrey Strain 2 Comments

The Dow and S&P 500 end at record highs for the 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)