Closing Market Summary: Stocks Trim Weekly Gains on FridayStocks slipped on Friday, ending a positive week on a disappointing note, as some geopolitical angst prompted investors to take some money off the table ahead of the weekend. The S&P 500 declined 0.3%, the Nasdaq Composite lost 0.5%, and the Dow Jones Industrial Average dropped 0.5% -- trimming their gains for the week to 1.8%-2.8%.
The major averages started the session modestly higher following better-than-expected first quarter earnings results from financial giants JPMorgan Chase (JPM 110.30, -3.07, -2.7%), Wells Fargo (WFC 50.89, -1.81, -3.4%), and Citigroup (C 71.01, -1.12, -1.6%). However, after a short stint in the green, the financial sector moved lower, bringing the broader market with it. Volatility picked up in the final stretch, with the major averages dropping to new lows before bouncing back, as investors contemplated the likelihood of a U.S.-led strike on Syria over the weekend.
President Trump has promised that the U.S. will be striking the Syrian government, which is accused of carrying out a chemical attack against the rebel-held town of Douma last Saturday, but the president has intentionally made the timing of the attack unclear. Adding to the uncertainty, an attack would likely put the U.S. at odds with Russia, who supports Syrian President Bashar al-Assad and has vowed to shoot down any missiles fired at Syria.
The energy sector (+1.1%) helped keep losses in check on Friday, extending its weekly gain to 6.0%, as oil prices rallied for the fifth day in a row. West Texas Intermediate crude futures jumped 0.3% to $67.26 per barrel -- their best level in more than three years -- benefiting, once again, from the uncertainty surrounding the oil-rich Middle East. The utilities (+0.7%), consumer staples (+0.5%), and real estate (+0.5%) sectors also advanced, but the seven remaining groups finished in the red.
Unsurprisingly, the financial sector (-1.6%) finished at the bottom of the sector standings following the negative reaction to the big bank earnings. The consumer discretionary space (-0.6%) also underperformed, but no other group lost more than 0.3%. Within the top-weighted technology space (-0.3%), chipmaker Broadcom (AVGO 246.94, +7.51) outperformed, adding 3.1%, following news that the company's board has authorized the repurchase of up to $12 billion of common stock.
In the bond market, U.S. Treasuries finished Friday mixed, flattening the 2s10s spread to 45 basis points -- its lowest level since 2007. The yield on the benchmark 10-yr Treasury note slipped one basis point to 2.82%, while the yield on the 2-yr Treasury note climbed two basis points to 2.37%.
Reviewing Friday's economic data, which was limited to the preliminary reading of the University of Michigan Consumer Sentiment Index for April and the Job Openings and Labor Turnover Survey for February:
- The preliminary reading of the University of Michigan Consumer Sentiment Index for April declined to 97.8 (consensus 100.6) from 101.4 in March.
- The key takeaway from the report is that the monthly drop was due to worries about trade policies and expectations for rising interest rates.
- The February Job Openings and Labor Turnover Survey showed that job openings decreased to 6.052 million from a revised 6.228 million (from 6.312 million) in January.
On Monday, investors will receive Retail Sales for March, the Empire State Manufacturing Survey for April, Business Inventories for February, and the NAHB Housing Market Index for April.
- Nasdaq Composite: +2.9% YTD
- Russell 2000: +0.9% YTD
- S&P 500: -0.7% YTD
- Dow Jones Industrial Average: -1.5% YTD