Wall Street Posts Best Week of 2012
FOX Business: The Power to Prosper
The Dow snapped its seven-day winning streak on Friday as traders fretted over the specter of gasoline prices cutting into consumer sentiment. However, the blue-chip average posted its best weekly rally since December 2011.
Today's Markets
The Dow Jones Industrial Average slipped 20.1 points, or 0.15%, to 13233, the S&P 500 gained 1.6 points, or 0.11%, to 1404 and the Nasdaq Composite fell 1.1 points, or 0.04%, to 3055.
The Dow and broader S&P 500 both jumped 2.4% this week, while the Nasdaq tacked on 2.4%. Indeed, the S&P is at its highest level since May 2008. Conversely, the CBOE's VIX, which is sometimes referred to as Wall Street's fear gauge, ended the week at its lowest level since 2007.
The advance in equities has been swift, with the major market averages notching multi-year highs on a regular basis, which has some analysts questioning if a pullback is on the horizon.
"The rally in global stocks and the selloff in [U.S. Treasuries] suggest to some that the markets are feeling that recovery may be finally on its way," Jose Wynne, an analyst at Barclays Capital wrote in a note to clients on Friday. "But a deeper look into global market indicators suggests that, in fact, the market is still going through a relief rally more than chasing a new trend on global growth."
Still, it is clear that traders are feeling more open to risky assets. U.S. Treasuries, seen as one of the world's safest asset classes, have been pummeled as investors have fled in droves to equities and other higher-paying assets. The 10-year yield, which moves in the opposite direction of the price, recently rose 0.019-percentage points to 2.299%, the fourth-straight daily advance.
Energy stocks like Schlumberger (NYSE:SLB) posted the best performance on the day by far on the back of a rally in futures markets.
The benchmark crude oil contract traded in New York rose $1.95, or 1.9%, to $107.06 a barrel. Wholesale New York Harbor gasoline gained six cents, or 2.1%, to $3.36 a gallon.
On the other side of the spectrum, retailers, utilities and technology companies struggled to some extent. The losses were restrained, however, by a generally optimistic economic outlook.
Sentiment Data Disappoint
The Reuters/University of Michigan consumer sentiment gauge fell to 74.3 in early March from 75.3 in February. Economists were expecting confidence to rise to 76. Additionally, inflation expectations, which tend to be a key driver of future prices, increased to the highest level since May 2011. Some consumer-driven companies like Procter & Gamble (NYSE:PG) and Tiffany & Co. (NYSE:TIF) took a modest hit on the report.
Inflation at the consumer level increased by 0.4% in February, in line with estimates, with a spike in gas prices accounting for almost 80% of the rise. Excluding the food and energy components, prices were up 0.1%, slightly under the 0.2% expected.
"Consumers have been feeling the pump price pinch as gasoline prices head north, placing pressure on household budgets," Chris Christopher, senior principal analyst at IHS Global Insight wrote in a research note.
The Federal Reserve said output by U.S. industrial companies was unchanged in February, compared with expectations of a 0.4% increase.
On the European front, Dow Jones Newswires reported European Union officials are considering increasing the firepower of the eurozone's rescue fund from 500 billion euros to 700 billion, citing unnamed officials. German Chancellor Angela Merkel had said earlier the cap remains at 500, Reuters reported.
In metals, gold slid $3.70, or 0.22%, to $1,656 a troy once.
Foreign Markets
European blue chips climbed 0.51%, the English FTSE 100 rose 0.36% to 5962 and the German DAX gained 0.17% to 7157.
In Asia, the Japanese Nikkei 225 ticked higher by 0.06% to 10130 and the Chinese Hang Seng slipped 0.17% to 21218.