The Week In Review


Week in Review: Choppy Week Leaves S&P in the Red

On Monday, equity and bond markets were closed in observance of Memorial Day.

Tuesday ended with solid gains for the major indices as the Dow Jones Industrial Average logged its 20th consecutive advance on a Tuesday. The early action saw nine of ten sectors register gains of at least 1.0%. However, the defensively-geared utilities spent the entire day in negative territory before ending lower by 1.2%. A Deutsche Bank downgrade of Exelon (EXC 31.34, -0.16) weighed on the rate-sensitive sector, which extended its May loss to 7.8%. The health care space was able to outperform other counter-cyclical groups as biotechnology displayed strength. The iShares Nasdaq Biotechnology ETF settled higher by 1.3%.

Wednesday saw the major averages settle with modest losses as the S&P 500 shed 0.7%. Equities slipped out of the gate as sellers drove the major averages to their lows 90 minutes into the session. This marked the return of bargain hunters, who helped the S&P return to its opening levels. However, the relative weakness of several influential groups like energy and health care kept the benchmark average from regaining its flat line.

On Thursday, stocks settled with modest gains as late afternoon selling knocked the major averages from their highs following a headline from Nikkei news, indicating Japan plans to impose new foreign exchange margin trading rules. The news caused dollar/yen to slip into the red while also weighing on equities. Most major financials saw gains of at least 1.0% as Morgan Stanley climbed 3.4% to outperform its peers. Meanwhile, the broader financial sector rose 1.1% to extend its May gain to 7.6%.