Category Archives: Economy/Stock Market

The week began with both the S&P 500 and the Dow increasing for a fifth session in a row, marking their longest winning streaks since October. A rebound in commodities prices helped stoke the recent rally. Oil prices have risen steadily since Russia, Saudi Arabia, Venezuela and Qatar agreed last month to freeze their output at January levels. Additionally, Friday’s strong U.S. jobs report calmed concerns, helping interest rates edge higher. The next day, the five-day winning streak was snapped as supply woes weighed on oil prices and worries about a prolonged slowdown in China resurfaced. Crude-oil tumbled, leading the market to resume its doubts over the potential for an output freeze. Gains in utilities and consumer-staples stocks imply that investors remain cautious in the wake of the recent rally. Stocks ticked higher Wednesday, led by a rise in energy shares after government data showed inventories of gasoline and other fuels fell, reflecting strong demand. In a pleasant surprise, wholesale inventories rose 0.3% in January, the first increase after three months of declines. Analysts expect Fed officials will likely to keep short-term interest rates unchanged at their March meeting, but leave open the possibility of rate rises in April and June. The European Central Bank cut interest rates in the Eurozone to zero, expanding its money printing program as it seeks to revive the region’s economy and fend off deflation. Indices closed the week well into the green zone on Friday. Energy stocks traded up on a jump in crude oil.

Monday brought February to a close with the S&P fell 0.41% in February after losing 5.07% in January, putting its year-to-date loss at 5.47%. Worries about China’s economy, depressed oil prices and signs of deflation in the Eurozone all weighed on the market. Tuesday, the stock indexes surged to their highest levels in nearly two months on signs of improvement in the U.S. economy. The Institute for Supply Management’s manufacturing index rose more than anticipated, rising from 48.2 in January to 49.5 in February. Though the index remained below the neutral threshold of 50, there was improvement in the production and inventory index. Higher oil prices fueled a rally mid-week, as energy shares led the S&P 500 up. Data showing continued strength in the labor market attracted attention as investors search for clues about when the Fed will make its next interest-rate increase.  On Thursday, the Non-Manufacturing Index from the Institute for Supply Management indicates growth in February at 53.4%. The index for January was 53.5%, thus reflecting growth, but at a slower rate. The news from the employment sector continues to be favorable based on the latest report from the Bureau of Labor Statistics. Total nonfarm payroll employment increased by 242,000 in February, while the unemployment rate was unchanged at 4.9%.

The week saw a mixed bag of information from some major economic sectors, which may have influenced the equities markets to record some marginal gains by week’s end. On Monday, both the Dow Jones Industrial Average and the S&P 500 indices increasing 1.4% to reach more than six-week highs, despite the day coming in as the second lowest volume trading day for the year. The gains were nearly wiped out the next day when there was speculation about energy-company loan defaults. Energy companies fell sharply after Saudi Arabia’s oil minister said not to expect production cuts. The falling oil prices created a drag on shares of exploration-and-production companies, with energy stocks in the S&P 500 falling 3.2%. By mid-week, U.S. stocks rose, recovering from earlier losses as oil prices turned higher. The rebound was broad-based, with nearly every S&P 500 sector eking out a gain. In economic news, the latest report from the Bureau of Economic Analysis showed consumers increased spending in January, as personal spending increased 0.5% from December. New orders for durable goods rose 4.9% in January, following a steep decline in December. The important details on core capital goods were positive overall, with orders up 3.9% and shipments down just 0.4%.

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%.

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.