The Week In Review

12/24/15

The stock market completed an abbreviated trading week on a flat note as the sleepy Thursday session produced a slightly lower finish for the S&P 500 (-0.2%) while the Nasdaq Composite (+0.1%) settled just above its flat line. For the week, the S&P 500 gained 2.8% and the Nasdaq advanced 2.6%.

The Thursday half-session had the makings of a range-bound affair from the start, considering index futures spent the night inside narrow ranges. The overnight action saw mixed trade in Asia while yen strength pressured the dollar/yen pair to 120.30, where the pair traded through the New York session. Similarly, the few European markets that were open ended the day on a mixed note and there was no news on the Spanish political front.

Once the opening bell rang, the energy sector (-0.9%) slumped to the bottom of the leaderboard and remained there into the close. The sector halved its loss intraday, but returned to its low by the end of the day while crude oil climbed 1.6% to $38.08/bbl. Despite today's decline, the energy sector gained 4.8% for the week and crude oil advanced nearly 10.0%.

Outside of energy, the remaining sectors spent the bulk of the session near their flat lines, climbing into the green during the final hour; however, a late wave of selling sent the entire market to its opening low. The health care sector (+0.1%) settled in the lead thanks to strength in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 339.79, +1.12) climbed 0.3%, which kept the Nasdaq ahead of the S&P 500 throughout the day.

To be fair, the Nasdaq also drew strength from chipmakers, evidenced by a 0.4% gain in the PHLX Semiconductor Index. Meanwhile, the broader technology sector (-0.1%) was held back by large cap names like Apple (AAPL 108.03, -0.58), Alphabet (GOOGL 765.84, -2.67), and Microsoft (MSFT 55.67, -0.15).

Above all, today's session saw very limited participation with fewer than 400 million shares changing hands at the NYSE floor.

Treasuries are on track to register slim gains with the bond market set to close in an hour. The 10-yr yield is lower by a basis point at 2.25%.

The weekly initial claims report was slightly better than expected, with claims for the week ending December 19 dropping by 5,000 to 267,000 (Briefing.com consensus 271,000). However, it was no different from what has been seen in these weekly reports for some time. Initial claims have been bounded between 250,000 and 300,000 since July 2014. The four-week moving average for initial claims increased by 1,750 to 272,500.

Continuing claims for the week ending December 12 decreased by 47,000 to 2.195 million (Briefing.com consensus 2.238 mln). That left the four week moving average at 2.211 million, up 10,000 from the prior week.

Investors will not receive any economic data on Monday.

Nasdaq Composite +6.6% YTD

S&P 500 +0.1% YTD

Dow Jones Industrial Average -1.5% YTD

Russell 2000 -4.3% YTD

Week in Review: Stocks Trot Higher on Light Volume

The stock market began the abbreviated trading week on a higher note thanks to a final-hour rally that lifted the market back to its opening high. The S&P 500 added 0.8% while the Nasdaq Composite (+0.9%) outperformed slightly. Overnight, Asian markets had a mixed showing with China's Shanghai Composite (+1.8%) outpacing other regional indices thanks to stimulus hopes. Meanwhile, European indices flashed solid intraday gains, but they slid into the close with Spain's IBEX diving 3.6% due to political uncertainty stemming from general elections that took place over the weekend. Mariano Rajoy's Partido Popular came out on top, receiving 123 votes, but forming a lasting coalition government will be a challenge considering the runner-up Socialist party has ruled out forming a joint government with PP. Spain's 10-yr note sold off in response, sending its yield higher by nine basis points to 1.79%. Once the attention shifted to the U.S., equity indices spiked out of the gate, hitting their session highs during the opening hour of the trading day. All ten sectors took part in the rally, but the market ran into some resistance that coincided with renewed selling in crude oil, which ended the day lower by 1.3% at $35.79/bbl.

The stock market registered its second consecutive advance on Tuesday with the S&P 500 climbing 0.9%. The benchmark index returned above its 100-day moving average (2,026) while the Nasdaq Composite (+0.7%) underperformed throughout the day. Overall, the Tuesday affair was very quiet, which was evidenced by light trading volume as fewer than 850 million shares changed hands at the NYSE floor. Equity indices ranged near their flat lines through the first two hours of the session, climbing to new highs during the afternoon. All ten sectors ended the day with gains, paced by the energy sector (+1.2%), which settled among the leaders. To little surprise, the rally in the energy sector was underpinned by crude oil as the commodity advanced 1.0% to $36.14/bbl. Similarly, another commodity-linked sector—materials (+1.2%)—spent the day near the top of the leaderboard while most other cyclical groups posted slimmer gains.

The major averages enjoyed a broad-based rally on Wednesday and the steady climb was undoubtedly facilitated by light trading volume ahead of Thursday's abbreviated Christmas Eve session. The S&P 500 spiked 1.2%, ending right above its 50-day (2,063) moving average, and the Nasdaq Composite (+0.9%) followed not far behind. Equity indices registered roughly half of their gains right at the open, rallying behind the energy sector (+4.4%), which held a solid lead throughout the day thanks to a rally in crude oil. The energy component surged 3.8% to $37.50/bbl, catching a second wind from bullish inventory data; however, it wasn't just energy, as every other sector ended the day comfortably in the green.