A late rally on Friday sent stocks to the plus side; however, it wasn’t enough to take the blue chips higher for the week. Health care, energy and materials ended the week in the red, while commodity-related sectors ended the week higher, helped by Friday’s last-hour rally. iShares Nasdaq Biotechnology (IBB) closed at its high of the day after being down 1%.
The Thomson Reuters/University of Michigan’s consumer sentiment index for June came in at 82.5, up from 81.9 in May, versus a preliminary reading of 81.2. Gold futures rose 0.2% to $1,319 an ounce. Crude oil fell 0.1% to settle at $105.74 a barrel.
In corporate news, DuPont (DD) fell 3.3% after management lowered its earnings outlook. Nike (NKE) jumped 1.1% following better-than-expected quarterly results. And Manitowoc (MTW) rose 10.8% after Relational Investors disclosed an 8.5% stake in the company and called for it to spin off its food-service-equipment business. (I recommended MTW as the Trade of the Day on June 23.)
At Friday’s close, the Dow Jones Industrial Average rose 6 points to 16,852, the S&P 500 gained 4 points to 1,961, and the Nasdaq was up 19 points at 4,398. The NYSE traded total volume of 3.5 billion shares, and the Nasdaq crossed 2.6 billion shares. On the Big Board, advancers outpaced decliners by 2.1-to-1, and on the Nasdaq, advancers were ahead by 1.7-to-1.
For the week, the Dow fell 0.6%, the S&P 500 lost 0.1%, the Nasdaq gained 0.7%, and the Russell 2000 rose 0.1%.
For mid- and small-cap investors, Friday provided the thrust needed to put those groups back in the lead. The closing half hour was the key to success since during the day the market lagged. But in the last half hour both the Russell 2000 and Nasdaq rallied, closing at their highs of the day. The Nasdaq made a new 14-year closing high.
Conclusion: Even though the big caps failed to fully follow the lead of the small and mid caps, Friday was a technical success. Both the Russell 2000 and Nasdaq closed on their highs of the day.
We are back at a 70/30 investment split of equities to cash from a temporary investment halt. All indices have weathered a test of support, and trends now point higher pending some unforeseen bearish development. The latter appears unlikely in light of the stock market’s recent ability to absorb bad news.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.