Despite being closed Monday in honor of the President’s Day holiday, stocks got off to a great start on Tuesday after being beaten down on a global economic slowdown. The S&P 500 rallied to its biggest two-session gain since August as investors piled into Financial and Technology stocks and sold off other “safer” asset classes such as gold and treasury bonds.
The week began with a tumble in oil prices and more signs of economic weakness in China, which resulted in modest losses for most of the trading session. However, stocks pushed higher in the last hour of trading to close the day nearly flat. U.S. and European stock indices fell sharply on Tuesday, and buyers sought safe-haven government bonds after another tumble in oil prices. Additionally, Energy stocks retreated after reporting less-than-optimum earnings details. Wednesday proved to be another day saved by a late session rally. The Dow staged a rebound from early low levels to close higher. The S&P 500 landed in the green while the NASDAQ shed some points. The Institute for Supply Management showed a downtick to 53.5 in January from 55.8 in December, marking the slowest pace for services industry activity since February 2014. Stocks climbed on Thursday despite volatile trading. Labor Department data showed initial jobless claims increased by 8,000 to 285,000 last week, while continuing claims decreased by 18,000 to 2.255 million. Non-farm business productivity slipped 3% in the fourth quarter of 2015, versus a 2.1% uptick in the third quarter. Technology stocks led the way down on Friday as stocks traded lower on a variety of economic news. The economy added fewer jobs than expected in January. Payrolls increased by 151,000 versus an anticipated addition of 190,000, while the unemployment rate ticked down to 4.9%.
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The markets started the week on a down note as investors looked for clues about whether trouble overseas could begin to depress U.S. growth. Adding to the pressure, investors are worried about the Federal Reserve’s plan for raising interest rates. A drop in crude oil brought energy stocks down. With Tuesday’s jump in oil prices, energy brands rose and brought the market indices along for a green finish. Measuring consumer confidence, the Conference Board data hit 98.1 for January versus a reading of 96.3 in December. Mid-week, U.S. stocks declined as the Federal Reserve kept a March increase in interest rates on the table, unnerving investors after weeks of sharp swings in global markets. The Fed said in its policy statement that it is “closely monitoring” developments in global economies. Reversing course again on Thursday, the markets closed up in the wake of favorable earnings and on word of a proposed five percent production cut from Saudi Arabia. The rally continued Friday with Blue Chip brands leading the way. Also adding to the gains, manufacturing in the Midwestern region stepped up this month. The Chicago Purchasing Managers Index registered a reading of 55.6 in January, up from December’s reading of 42.9 and well beyond an expected score of 45.
After the Martin Luther King, Jr. federal holiday on Monday, U.S. stocks enjoyed their first week of gains in a month. The markets closed Tuesday mixed, as the Dow’s turbulent session ended with gains. The S&P 500 ticked up slightly while the NASDAQ shed some points. Shares rose in Asia and Europe on Tuesday after China released economic growth figures and Brent crude oil, the global benchmark, climbed. In the United States, however, oil prices and energy shares retreated, leaving the broader market with only minuscule gains after a morning rally. Mid-week, the markets closed well into red territory after a new low in crude oil. Oil’s plunge, now in its 19th month, largely has been driven by oversupply during a production boom in the United States. Also, Economic data released Wednesday showed a slight decrease in the Consumer Price Index; however, all items less food and energy rose 0.1% in December, its smallest increase since August. Reports also showed an unexpected drop in housing starts in December. The index reversed course on Thursday, as markets were positive after a rebound in crude oil prices. Additionally, Labor Department figures showed 293,000 initial jobless claims for last week. Friday’s rally pushed the markets higher for the week.
In today’s Marietta Daily Journal, Bil Lako, CFP® explains that while the markets are down, it is more important to look long-term. Read the Article
Our experts discuss 2016’s turbulent start and what active investors should be looking for in the market today.
The indices closed mixed on Monday with late day trading leading the Dow and S&P 500 into the green zone. The NASDAQ shed some points, and Small-Cap stocks briefly fell into a bear market. On Tuesday, a late afternoon rally left indices positive for the day, with NASDAQ trading leading the advance. Crude oil briefly fell below $30 a barrel; however, West Texas Intermediate crude managed to settle at $30.79 a barrel. U.S. stocks tumbled on Wednesday to their lowest close since September, and oil prices gave up an early rally on mounting worries about the global economy. In economic reports, the Fed’s Beige Book reported growth in consumer and housing sectors. Expansion in manufacturing, agriculture and energy sectors continued to lag in recent months. Trading closed in green territory on Thursday as Labor Department data showed initial jobless claims increased to 284,000 last week. Unfortunately, indices closed the session well into the red zone on Friday with stocks trading into territory not seen since August. West Texas Intermediate crude dipped 5.7% to settle at $29.14 a barrel.
A sharp selloff in China’s market resulted in a rocky trading day for the U.S. markets. Most blue chip stocks retreated, and Energy stocks traded lower on a downswing in crude oil prices. West Texas Intermediate crude dipped 0.8%, settling at $36.76 a barrel. Trading on Tuesday closed with gains, with Consumer Staples and Telecommunication stocks helping the tepid recovery from the sharp selloff that started the year. The rally was short-lived as the markets closed Wednesday in the red zone, brought down by Energy stocks. Additionally, Energy Information Administration showed an unexpected increase of 2.6 million barrels in crude inventories in the past week. Analysts were forecasting a decline in reserves. National Association of Realtors data showed a 0.9% decrease in November for pending home sales. Stocks continued to tumble Thursday following Labor Department data which showed that initial jobless claims fell by 10,000 to 277,000 last week. The decline seemed to level out on Friday when the Bureau of Labor Statistics showed an addition of 292,000 jobs in December. Looking elsewhere, manufacturing levels made a fractional retreat in December. The Institute for Supply Management’s survey slipped to 48.2 from November’s reading of 48.6.
The markets started the week on a positive note with Energy and Telecom stocks posting slight gains ahead of the December Federal Reserve meeting. The good news continued Tuesday as Energy stocks stepped up on a rebound in crude oil. Consumer prices held steady in November, as the Consumer Price Index was unchanged last month after climbing 0.2% in October. Discounting food and energy prices, the CPI jumped up 0.2% in November. The week’s rally continued on Wednesday when stocks stepped up on news from the December Federal Reserve meeting where policymakers boosted the benchmark interest rate by a quarter of a percentage point to between 0.25% and 0.50%. On another note, Energy stocks traded lower on a dip in crude oil. The markets closed trading at session low levels on Thursday. Labor Department data showed initial jobless claims decreased by 11,000 to 271,000 last week, while continuing claims fell by 7,000 to 2.238 million. The slip continued on Friday when the market closed at session lows. Stocks declined amid another downswing in oil.
