On Friday, the Dow Jones Industrial Average and the S&P 500 fell 0.1%, but the Nasdaq gained 0.1% as Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) rose to new highs.
Friday’s action capped a week in which brick-and-mortar retail stores, one after another, reported disappointing earnings. The decline in retail pulled the S&P 500 down 0.3% for the week, its first weekly decline since mid-April. Poor sales and earnings by Macy’s Inc (NYSR:M) and Kohl’s Corporation (NYSE:KSS) dropped their shares by about 17% and 8%, respectively.
On Friday, the best-performing sectors were defensive: utilities gained 0.5%, telecommunications rose 0.9% and healthcare gained 0.4%. The consumer discretionary sector rose 0.7% and would have done better had retail stocks performed, but only three of the 12 industries in that sector were lower. The main reason that the sector advanced was because of a 6.04% rise in automobile stocks.
At the close on Friday, the Dow Jones Industrial Average fell 23 points to 20,897, the S&P 500 lost 4, falling to 2,391, the Nasdaq gained 5 to close at 6,121, and the Russell 2000 fell 7 at 1,383. The NYSE’s primary exchange traded 775 million shares with total volume of 3.3 billion shares. The Nasdaq crossed 1.7 billion shares. On the Big Board, decliners outpaced advancers by 1.3-to-1, and on the Nasdaq, decliners led by 1.4-to-1. Blocks on the NYSE fell to 6,497 from 7,112 on Thursday.
The CBR reversal (red dot) at 21,071 marks the top of a rally that contains two continuation gaps, the first of which was filled on Thursday’s upside reversal from its 50-day moving average. The 50-day moving average at 20,787 marks a major near-term support line for the Dow Jones, followed by the double bottom of late-March and mid-April at about 20,405.
Conclusion: The “market” is doing what it usually does as it enters late spring/early summer: not much. Even though volatility has picked up a bit, the overall trend is up and the Dow Jones has lots of support to maintain a sluggish sideways near-term trend. The reversals up on Thursday by both the Dow Jones and the S&P 500 occurred just where we would expect them to, and both ended at close to their intraday highs.
On Tuesday, we will examine the impact of the restricted trading range on the small- and mid-cap indices.
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.
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