Friday’s pre-holiday session provided little in the way of gains even though most markets closed at or near the highs of the day. After languishing for most of the session, large blocks of buyers emerged in the final minutes driving prices to small gains.
The Dow Jones Industrial Average closed with a gain of 0.07%, the S&P 500 rose 0.13%, Nasdaq gained 0.28% and the Russell 2000 gained 0.65%. Most of the S&P’s sectors closed up for the day with healthcare leading, up 82 basis points.
The clear leading sector for the week, however, was the telecommunication services group, up 1.28%. Second for the week was the industrials, up 0.73%, followed by the healthcare stocks, up 0.73%.
There was little in the business news to have an impact on the overall market.
At the close the Dow Jones gained 15 points at 19,994, the S&P 500 rose three points to 2,264, Nasdaq gained 15 to close at 5,463 and the Russell 2000 closed at 1,372, up nine points.
The NYSE’s primary exchange traded 515 million shares with total volume of over 2 billion shares, and Nasdaq crossed 1.1 billion shares. On the Big Board, advancers outpaced decliners by 1.5-to-1, and on Nasdaq advancers led by 2.2-to-1. Blocks fell to 4,615 from 5,484 on Thursday.
For the week: The DJIA rose 0.1%, the S&P 500 gained 0.1%, Nasdaq gained 0.3% and the Russell 2000 gained 0.1%.
The NYSE Composite Index has not yet broken to a new closing high. The last new close was made in mid-May 2015 at 11,228. A break of that number would break the neckline of a compound head-and-shoulder formation and confirm that a secular bull market for this index is still intact. The target would be 13,227, or an advance of almost 18% above the 2015 high.
Conclusion: Could price-earnings expansion support a rally of almost 18%? S&P projects their target in 2017 at 2,332, but Sam Stovall thinks that, despite a trailing P/E of 25, they could be underestimating their target by a significant amount.
One thing is certain and that is that once the Dow crosses the 20,000 line, a follow-up rally will occur, and unlike last year, January could regain its reputation as a means to forecast the trend for the remainder of the year.
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.
