Closing Market Summary: Stocks End Strong Week on Upbeat Note
The major averages capped a solid week with a broad advance. The S&P 500 added 0.5%, extending its weekly gain to 2.7%. Equities spent the entire session in a steady climb after the final reading ofthird quarter GDP sparked a broad-based rally. The report pointed to growth of4.1%, which was the strongest reading since the economy expanded by 4.9% in the fourth quarter of 2011, and well above the 2.5% gain reported in the second quarter. Real final sales, which exclude inventory growth, increased 2.5%. That was up from a 1.9% gain reported in the second estimate, and was the largest gain since a 3.4% increase was observed in Q4 2011.
Even though all the key indices rallied, the small-cap Russell 2000 (+1.9%) had the best showing. Meanwhile, the S&P 500 posted a more modest gain as nineof ten sectors finished in the green. The largest S&P 500 sector, technology (+0.9%) played a significant part in the rally. The group received support from large-cap names like Apple (AAPL 549.02, +4.56), Google (GOOG 1100.62, +14.40), and Microsoft (MSFT 36.80, +0.55). Chipmakers also chipped in as the PHLX Semiconductor Index gained 0.8%. On a related note, the tech sector's strength contributed to the outperformance of the Nasdaq (+1.2%), which also received noteworthy support from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 223.70, +5.71) surged 2.6%. In turn, biotechnology gave a boost to the health care sector (+0.5%), which kept pace with the S&P 500 throughout the session. Another influential group, financials (+0.5%) lagged for the majority of the session, but caught up to the broader market in the late afternoon.
Although most sectors had a strong showing, energy (+0.1%) and materials (+0.3%) struggled to gain traction. The energy sector underperformed as two large members, Chevron (CVX 122.78, -0.44) and Exxon Mobil (XOM 98.68, -0.75) spent the day in the red. The pair of Dow components also factored into the underperformance of the Dow Jones Industrial Average (+0.3%). On the downside, the telecom services sector (-0.6%) was the lone decliner.
Today's participation was well above average as nearly two billion shares changed hands on the floor of the New York Stock Exchange. The final tally wasaided by additional activity associated with quadruple witching and quarterly rebalancing that took place today. Treasuries ended on their highs after staging an intraday reversal. The 10-yr yield tested resistance earlier this morning at 2.95% (September closing high). Despite the stronger-than-expected Q3 GDP revision, the 10-yr came barreling back in a surprising manner that probably stirred some short-covering activity that has exacerbated today's gains. The 10-yr note settled higher by 11 ticks with its yield down four basis points at 2.89%. On Monday, November personal income, personal spending, and core PCE prices will all be reported at 8:30 ET while the final reading of the Michigan Consumer Sentiment Survey will be released at 9:55 ET.
o Nasdaq +35.9% YTD o Russell 2000 +35.0% YTD o S&P 500 +27.5% YTD o DJIA +23.8% YTD