Closing Market Summary: Ending On a Positive NoteU.S. equities reclaimed a nice chunk of their losses for the week on Friday in another volatile trading session. The S&P 500 gained 1.5%, while the Dow Jones Industrial Average and the Nasdaq Composite advanced 1.4% apiece. The small-cap Russell 2000 also rallied, climbing 1.0%.
The S&P 500 covered a wide range of about 105 points--up 2.2% at its high and down 1.9% at its low.
Stocks opened in positive territory, but began moving lower shortly thereafter. The market hit negative territory in the late morning, but the retreat came to a halt as the S&P 500 approached its 200-day simple moving average (2539), which it had not tested since right before the 2016 presidential election.
The S&P 500 dipped slightly below that key technical level, which served as a springboard for renewed buying efforts which culminated in a late rally that left equities at their session highs.
The defense of the 200-day simple moving average proved to be a silver lining for investors, who endured an otherwise terrible week. The S&P 500, the Dow, and the Nasdaq lost a little more than 5.0% apiece this week and now trade roughly 9% below the record highs they hit on January 26.
10 of 11 sectors finished Friday in the green as advancing issues outnumbered declining issues 1.4 to 1 at the New York Stock Exchange.
The top-weighted technology (+2.5%) and financials (+1.9%) sectors were relatively strong throughout the session, settling near the top of the sector standings.
Within the tech space, NVIDIA (NVDA 232.08, +14.56) jumped 6.7% after blowing past Q4 earnings and revenue estimates and raising its guidance for the first quarter.
On the downside, the energy sector (-0.4%) finished at the bottom of the sector standings as the price of crude oil declined for the sixth session in a row. West Texas Intermediate crude futures tumbled 3.1% to $59.23 per barrel--their lowest level since the end of December.
In Washington, Congress passed a budget deal early Friday morning, but not before shutting down the government for a few hours--the previous spending deal ran out at midnight. The deal will increase spending caps and raise defense and non-defense spending by approximately $160 billion and $130 billion, respectively.
The bill will also provide an additional $90 billion for disaster aid and extend the debt ceiling until 2019.
In the bond market, U.S. Treasuries ended the week on a higher note, with shorter-dated issues showing relative strength. The yield on the 2-yr Treasury note declined seven basis points to 2.06%, while the benchmark 10-yr yield slipped two basis points to 2.83%. Yields move inversely to prices.
Friday's economic data was limited to December Wholesale Inventories, which increased 0.4% month-over-month (consensus +0.2%). The key takeaway from the report was that the sales increase outpaced the inventory increase by a sizable margin. That is a step in the right direction for wholesalers trying to regain some pricing power.
On Monday, investors will receive just one piece of data--the January Treasury Budget--which will be released at 2:00 PM ET.
- Nasdaq Composite: -0.4% YTD
- S&P 500: -2.0% YTD
- Dow Jones Industrial Average: -2.1% YTD
- Russell 2000: -3.8% YTD
