The Week In Review

2/17-2/20/15

WRAPX Closing Market Summary: S&P 500 Settles at Fresh Record High

The major averages finished what had been a range-bound week with a Friday rally that helped the S&P 500 (+0.6%) add 0.6% for the week. The benchmark index settled at a fresh record high at 2,110.30 while the Dow (+0.9%) outperformed today, but ended the week just ahead of the benchmark index (+0.7%).

Once again, Friday's main focus was on Greece with the market starting under modest pressure after morning reports dampened hopes for an agreement at today's Eurogroup meeting, the start of which was delayed twice. However, the market spent the morning in a slow climb off its low and the S&P 500 was able to turn positive with help from reports indicating the two sides were able to reach an agreement to extend funding for Greece until the end of June. Per today's accord, the Greek government has agreed to honor current obligations in full and is expected to present a list of reforms on Monday.

The afternoon developments weighed on Treasuries, causing the 10-yr note to surrender its intraday gain and end on its low with the benchmark yield higher by a basis point at 2.12%. Meanwhile, the Dollar Index surrendered its intraday gain, ending little changed.

Nine of ten sectors posted gains with health care (+1.0%) and industrials (+0.9%) ending in the lead. The two sectors outperformed throughout the session with the industrial sector rallying behind a few large components. Deere (DE 92.43, +0.72) added 0.8% in reaction to better than expected earnings and cautious guidance while Dow component Boeing (BA 158.31, +4.56) jumped 3.0% after securing a helicopter delivery contract with the U.S. Army.

Elsewhere among heavily-weighted cyclical sectors, financials (+0.8%) spiked in reaction to the Eurogroup-Greece news while the largest sector by weight—technology (+0.6%)—settled in-line with the broader market.

On the flip side, energy (-0.3%) ended at the bottom of the leaderboard while crude oil fell 1.9% to $50.82. The energy component settled near its low that was reached after the latest Baker Hughes rig count registered its 11th consecutive decline, which indicated the number of active oil and gas rigs declined by 48 to 1310. For its part, the energy sector climbed off its low ahead of the close, but still ended the week lower by 2.4%.

Over on the countercyclical side, consumer staples (+0.3%), telecom services (+0.1%), and utilities (unch) underperformed while the health care sector (+1.0%) was boosted by biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 336.43, +4.44) climbed 1.3% while the broader health care sector ended the week ahead of other groups with a gain of 1.9%.

For the first time in two weeks, trading volume was close to long-term averages, but that was largely due to today's options expiration. As a result, more than 810 million shares changed hands at the NYSE floor.

Investors did not receive any economic data today and Monday's data will be limited to the Existing Home Sales report for January, which will be released at 10:00 ET.

Nasdaq Composite +4.6% YTD

S&P 500 +2.5% YTD

Russell 2000 +2.2% YTD

Dow Jones Industrial Average +1.8% YTD

Week in Review: S&P 500 Holds Narrow Range

The stock market kicked off an abbreviated trading week with a sleepy Tuesday session that had the S&P 500 (+0.2%) locked in an eleven-point range while the tech-heavy Nasdaq (+0.1%) spent the bulk of the day near its flat line. Broadly speaking, the market appeared to be little concerned with weekend developments overseas, making the price action more closely correlated with the gyrations in the oil market. The benchmark index returned to its session high just above the 2,100 mark during the final minutes of the day; however, that move was not correlated to anything in particular. A ceasefire between Ukraine and Russia-backed rebels went into effect over the weekend, but the agreement only reduced fighting in the eastern part of the country. Most importantly, the truce failed to stop the assault on an important rail hub in Debaltseve, with rebel leaders claiming control of the area, according to the Associated Press. Meanwhile in Brussels, Monday's Eurogroup meeting with Greece provided little reason for optimism for a swift solution. Five sectors posted gains with health care (+0.7%) spending the entire session in the lead. The influential group was underpinned by biotechnology with the iShares Nasdaq Biotechnology ETF (IBB) adding 1.0%.

The major averages finished the Wednesday session on a flat note thanks to a late afternoon crawl that lifted the market off its low. The S&P 500 ended unchanged while the Nasdaq outperformed, adding 0.1%. For the second day in a row, stocks opened with slim losses and drifted inside narrow ranges until the early afternoon. The S&P 500 spiked off its low and made a brief appearance in the green following the FOMC minutes from the January meeting, but the index was back near its low just 30 minutes later. A second effort in the late afternoon propelled the S&P 500 back to its flat line ahead of the close. It was a bit surprising to see the market react rather lackadaisically to the FOMC minutes, considering they revealed a high likelihood that the Fed will not be raising rates any time soon due to several risks including declining inflation and weak global growth. Meanwhile, the Treasury market heard the message and responded with a rally. The 10-yr note reclaimed about half of yesterday's decline with the benchmark yield dropping six basis points to 2.08%. On a related note, the dollar surrendered its intraday gain following the minutes. Six of ten sectors posted gains, but only three—industrials (+0.6%), consumer staples (+0.6%), and utilities (+2.4%)—added more than 0.3%. On the flip side, financials (-0.6%) surrendered their gain from yesterday while the energy sector (-1.2%) was responsible for much of the early weakness.

Equity indices endured yet another range-bound, low-volume affair on Thursday that saw the S&P 500 (-0.1%) end just below its flat line. The market started the day under pressure that was largely due to early weakness in the energy sector. The growth-sensitive group narrowed its loss to 0.8% by the close, but was down as much as 2.5% at the start. Meanwhile, crude oil tested the $50.00/bbl level in the morning, but narrowed its loss to 0.6% at $51.83/bbl by the pit close. Oil rallied through the early afternoon release of the latest EIA storage report, which showed the largest inventory build for this time of the year in the past 80 years.