The Week In Review

3/23-3/27/15

The major averages registered their first advance of the week on Friday with the Nasdaq Composite (+0.6%) ending ahead of the S&P 500 (+0.2%). Despite today's modest uptick, the two indices ended with respective losses of 2.7% and 2.2% for the week.

Overall, the final session of the week was fairly quiet with equity indices bouncing around narrow ranges. The S&P 500 spent the day in a ten-point channel with the bulk of the action occurring near its 100-day moving average (2,058). The benchmark index settled below that level on Thursday, but managed to reclaim that mark today.

Six of ten sectors registered gains with most countercyclical groups showing relative strength. The telecom services sector was an exception, ending flat, while consumer staples (+0.6%), utilities (+0.5%), and health care (+0.7%) posted gains.

Most notably, the third largest sector by weight—health care—was underpinned by biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 347.46, +6.65) surged 2.0%, but still ended the week lower by 5.2%. Today, however, the industry group did some heavy lifting and contributed to the outperformance of the Nasdaq even as large cap technology names struggled.

The technology sector (+0.2%) started in-line with the market, but slumped from its opening high in a move that coincided with Apple (AAPL 123.25, -0.99) turning negative. The stock settled lower by 0.8%, but managed to hold its 50-day moving average (122.67). Meanwhile, high-beta chipmakers traded in mixed fashion until the final hour when it was reported that Intel (INTC 32.00, +1.92) is in talks to acquire Altera (ALTR 44.41, +9.83). The two names soared 6.4% and 28.5%, respectively and the news set a fire under the entire chipmaker space with the PHLX Semiconductor Index surging 2.8%. It is worth noting that the late surge lifted the entire sector into positive territory. 

Elsewhere among cyclical sectors, energy (-0.7%) and financials (-0.1%) lagged while consumer discretionary (+0.5%) and industrials (+0.4%) outperformed.

The energy sector ended the day at the bottom of the barrel, but still finished the week ahead of the remaining cyclical sectors (-0.7%). Crude oil factored into today's weakness as the energy component fell 5.0% to $48.87/bbl and continued its retreat during electronic trading. Despite the plunge, WTI crude gained 4.9% for the week.

Also of note, the financial sector (-0.1%) finished with a slim loss today, but ended the week behind the remaining nine sectors with a 3.0% loss.

On the flip side, the consumer discretionary sector (+0.5%) ended ahead of other cyclical groups with help from homebuilders and retailers. The iShares Dow Jones US Home Construction ETF (ITB 27.79, +0.46) gained 1.7% while SPDR S&P Retail ETF (XRT 100.24, +0.82) advanced 0.8%.

Treasuries spent the day in a steady climb from their overnight lows with the 10-yr yield slipping four basis points to 1.96%.

Today's participation was below average with roughly 725 million shares changing hands at the NYSE floor.

Economic data was limited to Q4 GDP and Michigan Sentiment:

GDP growth in Q4 2014 was unrevised in the third estimate and remained at 2.2% after increasing 5.0% in Q3. The Briefing.com consensus expected a revision to 2.4% 

Real final sales saw a slight upward revision to 2.3% from 2.1%, but nothing in the data altered the notion that economic growth trends slowed down significantly in the fourth quarter

The University of Michigan Consumer Sentiment Index was revised up to 93.0 in the March final reading from a preliminary reading of 91.2 while the Briefing.com consensus expected a revision up to 92.0

On Monday, February Personal Income, Personal Spending, and core PCE Prices will be released at 8:30 ET while the Pending Home Sales report for February will cross the wires at 10:00 ET.

Nasdaq Composite +3.3% YTD

Russell 2000 +2.9% YTD

S&P 500 +0.1% YTD

Dow Jones Industrial Average -0.6% YTD

Week in Review: Stocks Pull Back

The stock market began the trading week on a sleepy note. The Dow Jones Industrial Average (-0.1%) and S&P 500 (-0.2%) surrendered their slim gains during the final hour while the Nasdaq Composite settled lower by 0.3% after lagging throughout the session. Equity indices spent the entire Monday session near their flat lines while the Dollar Index (96.86, -1.05) extended its retreat that began during the previous week. The index fell 1.1% with the greenback giving up 1.4% to the euro (1.0966). The single currency rallied in the morning and saw little afternoon reaction to a joint press conference held by German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras. The two leaders did not provide any specifics about their earlier meeting, suggesting the two sides remain at odds with regard to finding a sustainable solution for Greece.

Equity indices registered their second consecutive decline on Tuesday with the S&P 500 retreating 0.6%. The benchmark index ended in-line with the Dow Jones Industrial Average while the Nasdaq Composite (-0.3%) outperformed slightly. Equities traded near their flat lines through the first half of the session before sliding to lows during afternoon action. All ten sectors finished the day in negative territory with technology (-0.3%) registering the slimmest loss. Also of note, the Dollar Index (97.15, +0.12) was on track for its third consecutive decline, but an early morning rebound following an in-line CPI report (+0.2%) helped the Index finish with a slim gain. Meanwhile, crude oil endured some intraday volatility before settling higher by 0.1% at $47.51/bbl. Strikingly, crude's flat finish could not stop the energy sector (-0.8%) from ending the day among the laggards. Notably, Whiting Petroleum (WLL) sank 19.5% after pricing a secondary share and note offering.

The market registered its third consecutive decline on Wednesday with the S&P 500 ending lower by 1.5%. The benchmark index settled below its 50-day moving average (2,067) while the Nasdaq Composite (-2.0%) underperformed throughout the day. The S&P 500 hovered near its flat line during the opening hour, but high-beta groups like biotechnology, chipmakers, and transport stocks began showing weakness early on and continued their retreat throughout the day. As a result, eight sectors settled in the red with five ending behind the benchmark index. Most notably, the technology sector surrendered 2.7% with chipmakers enduring even more aggressive selling. All 30 components of the PHLX Semiconductor Index (-4.6%) finished in the red with ARM Holdings (ARMH) and Lam Research (LRCX) leading the slide with respective losses of 6.2% and 7.6% while heavyweight Intel (INTC) tumbled 2.9%.

On Thursday, equities posted modest losses after climbing off their opening lows. The S&P 500 shed 0.2% and settled below its 100-day moving average (2,057) while the Nasdaq Composite (-0.3%) underperformed. Equity indices could not avoid registering their fourth consecutive decline, but they were able to avoid settling on their lows. The market began the day under pressure after overnight reports revealed that coalition forces from ten countries, led by Saudi Arabia, carried out air strikes against rebel forces in Yemen. This followed Wednesday's reports indicating Yemen's President Hadi fled his country by sea. The news gave a boost to the dollar, but the yen also rallied against its peers, which signaled caution among participants in the foreign exchange market. The Dollar Index (97.36, +0.38) gained 0.4% as the greenback spiked 0.8% against the euro, sending the single currency from a morning high near 1.1050 to 1.0880. For its part, the dollar/yen pair slipped 0.3% to 119.20 after testing the 118.50 level in the morning. In addition, the latest developments in the Middle East led to concerns about potential disruptions to the energy market. As a result, crude oil surged 4.6% to $51.43/bbl. However, the energy sector (-0.2%) could not make it out of the red.