On Friday, stocks declined after a volatile week that included most of the S&P’s sectors. The Dow Jones Industrial Average fell 0.5%, the S&P 500 lost 0.4%, and the Nasdaq declined just 0.1%.
The decline followed weak economic numbers from the August retail sales report. Thus investors who were prepared for a rate hike had to put that thought aside.
Also, the impact of the U.S. Justice Department’s proposal to “fine” Deutsche Bank AG (USA) (NYSE:DB) $14 billion — to settle a set of mortgage-securities probes going back to the financial crises — had a negative impact on the entire banking sector.
However, not all sectors closed in the red on Friday. The technology stocks, helped by a surge in the shares of Apple Inc. (NASDAQ:AAPL), closed up 3% for the week, though AAPL fell a fraction on Friday.
Crude oil (WTI) fell 6.2% for the week settling on Friday 2% lower at $43.03 for the October contract. Oversupply was blamed for the decline.
At the close on Friday the Dow Jones Industrial Average fell 89 points, closing at 18,124, the S&P 500 was down 8 points at 2,139, the Nasdaq fell 5 to 5,245, and the Russell 2000 closed at 1,225, down 2 points. The NYSE’s primary exchange traded 636 million shares with total volume of 4.8 billion shares. The Nasdaq crossed 2.9 billion shares. On the Big Board, decliners outpaced advancers by 1.8-to-1, and on the Nasdaq, decliners led by 1.2-to-1. Blocks on the NYSE rose to 6,739 from 4,597 on Thursday.
For the week: the DJIA gained 0.3%, the S&P 500 rose 0.5%, Nasdaq jumped 2.3%, and the Russell 2000 rose 0.3%.
The only major index to have violated the June high — considered an important technical number — is the S&P 500. This past week it reclaimed that high, which was broken by less than 2 points, and so the resistance line at 2,155 is again the next important barrier.
Conclusion: Just when most traders had accepted the fact that a rate increase would occur this year, weak statistics made the news and the Federal Reserve flinched again. Yes, Lucy yanked the football just as Charlie Brown kicked, putting poor Charlie on his rear again.
In other words: Market volatility increased.
This is an example of investors’ ability to accept news, even bad news, as long as a reasonable degree of certainty prevails. However, few are willing to invest during a time of uncertainty, especially uncertainty regarding interest rates.
Watch, following an Federal Open Market Committee meeting on Tuesday, after which should be an announcement that nothing of substance was decided, it is likely that we will again be barraged with speeches from Fed governors who were for, and against, a rate hike, along with when it could, might, and should have occurred.
A focus on plans to increase earnings, jobs, and economic growth would be a refreshing but unlikely change.
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.
