Published August 17, 2012
FOX Business: The Power to Prosper
If the markets rally for a sixth consecutive week, but no one is there to witness it, does it still count?
That question will be left up to investors next week after Wall Street wrapped up its longest win streak since January 2011 following a very quiet Friday that saw the major indexes barely budge.
The Dow Jones Industrial Average rose 25.09 points, or 0.19%, to 13275.20, the S&P 500 gained 2.65 points, or 0.19%, to 1418.16 and the Nasdaq Composite added 14.20 points, or 0.46%, to 3076.59. The FOX 50 picked up 1.39 points, or 0.13%, to 1062.89.
Despite the lack of market participation, the S&P 500 landed at fresh four-month highs and is less than one point away from notching a new four-year closing high. There were few economic reports to back the move higher, though new data did reveal consumer sentiment in August unexpectedly climbed to the highest level since May.
Underscoring the relative quiet that has descended upon Wall Street, the VIX volatility index retreated another 5.7% on Friday to tumble as low as 13.30 -- its lowest level since June 2007.
Further, the blue chips moved in an extremely tight trading range of just 36 points and crossed over the unchanged line countless times.
“This is a textbook summer Friday afternoon,” said Peter Kenny, managing director at Knight Capital Group (KCG).
Kenny said it’s hard to read too much into Friday’s session due to the low volume, saying, “It doesn’t mean anything.”
However, “what matters is that we’re close to four-and-a half year highs. There is a drift higher,” he said. “It’s good for people who have equity positions because those who are underweight are going to be forced to catch up.”
Friday's agenda lacked many market-moving earnings or economic reports, but traders did receive a surprise from the Thomson Reuters/University of Michigan consumer sentiment index, which increased to 73.6 in its preliminary August reading. The new report beat expectations for a slight rise to 72.4.
The markets had little reaction to the sentiment report, which comes on the heels of a much better-than-expected July retail sales report earlier this week.
However, Wall Street did manage to notch its longest winning streak in a year and a half. The week's gains largely occurred on Thursday, which featured a 10% surge for tech bellwether Cisco Systems (CSCO) and improving sentiment about the tumultuous eurozone.
On the commodities front, crude oil gained ground for the third consecutive week, picking up 41 cents a barrel, or 0.43%, on Friday to settle at a new three-month high of $96.01. Gold gained 20 cents a troy ounce, or 0.01%, to $1,616.30.
Ann (ANN), the parent of Ann Taylor, surged 20% after blowing away estimates with a 24% jump in second-quarter profits to 63 cents a share. The company also upped its 2012 sales targets above the Street's view.
Groupon (GRPN) shares dropped another 5% to fresh all-time lows after the embattled daily deals company was downgraded to "underweight" from "equalweight" by analysts at Evercore Partners (EVR). Citing concerns about a potential cash burn problem, Evercore also slashed its price target to $3 from $6.50.
Foot Locker (FL) beat the Street with a 59% leap in second-quarter earnings, thanks largely to a 9.8% surge in same-store sales. Net revenue rose 7.8% to $1.38 billion, narrowly topping estimates.
Aeropostale (ARO) retreated 11% a day after disclosing a 98% plunge in second-quarter earnings and issuing a tepid outlook for the third quarter. The teen apparel maker warned it experienced a "soft start" to the crucial back-to-school season.
The U.K.’s FTSE 100 gained 0.31% to 5852.42, Germany’s DAX rose 0.64% to 7040.88 and France’s CAC 40 advanced 0.23% to 3488.38.
In Asia, Japan’s Nikkei 225 jumped 0.77% to 9162.50 and Hong Kong’s Hang Seng rallied 0.77% to 20116.07.