Benchmarks lost their initial gains to end mostly flat as
apprehensions about contracting profits of financial bellwethers
dented investor sentiment on Friday. At the close of the trading
session on Friday, markets recorded their worst weekly performance
in four months. Benchmarks had started on a winning note boosted by
an unexpected increase in consumer sentiment which touched its
highest level in five years. However, the gains were eroded largely
by a decline in the financial sector and benchmarks ended flat.
The Dow Jones Industrial Average (DJI) edged up 0.02% to close
the day at 13,328.85. The Standard & Poor 500 (S&P 500)
lost 0.3% to finish Friday's trading session at 1,428.59. The
tech-laden Nasdaq Composite Index slipped 0.2% to end at 3,044.11.
The fear-gauge CBOE Volatility Index (VIX) was up 3.5% to settle at
16.14. Consolidated volumes on the New York Stock Exchange,
American Stock Exchange and Nasdaq were roughly 5.5 billion shares,
significantly lower than this year's daily average of 6.52 billion
shares. Declining stocks outpaced the advancers on the NYSE; as for
60% stocks that dropped, 35% stocks moved higher.
For the week, the Dow fell 2.1%, the S&P 500 lost 2.2% and
the Nasdaq slumped 2.9%. Benchmarks suffered throughout the week
and recorded their worst performance in four months. Markets did
have a positive report to cheer about as initial claims touched
their lowest level in more than four and half years. However,
benchmarks were under pressure through the week as investors
remained worried about how third-quarter earnings would shape up
amid gloomy global economic conditions.
Benchmarks began on a winning note following news that consumer
sentiment had jumped to the highest level in five years. The
University of Michigan-Thomson Reuters preliminary October index
rose to 83.1 from a final September reading of 78.3. The
preliminary reading was also ahead of consensus estimates of 77.9.
Consumer sentiment has been trending up since August; while August
registered a two-point gain, the index jumped four points in
September.
Despite positive data on consumer sentiment, the Consumer
Discretionary SPDR slipped a mere 0.02%. Performance of the related
stocks was mostly mixed. Stocks such as Costco Wholesale
Corporation (NASDAQ:
COST
), Dollar General Corp. (NYSE:
DG
), Dollar Tree, Inc. (NASDAQ:
DLTR
) and Fred's, Inc. (NASDAQ:
FRED
) lost 0.8%, 0.7%, 5.0% and 0.7%, respectively. On the other hand,
stocks such as Wal-Mart Stores, Inc. (NYSE:
WMT
), PriceSmart, Inc. (NASDAQ:
PSMT
), Target Corporation (NYSE:
TGT
) and Gordmans Stores, Inc (NASDAQ:
GMAN
) gained 1.1%, 1.3%, 0.4% and 0.8%, respectively.
Separately, the U.S. Bureau of Labor Statistics released
Producer Price Index (PPI) data for the month of September.
According to the report, PPI has increased 1.1% last month, beating
consensus estimates of 0.8. Getting into the details of the report:
"Prices for finished goods advanced 1.7 percent in August and moved
up 0.3 percent in July. At the earlier stages of processing, prices
received by manufacturers of intermediate goods rose 1.5 percent in
September, and the crude goods index advanced 2.8 percent".
Meanwhile, financial bellwethers JPMorgan Chase & Co (NYSE:
JPM
) and Wells Fargo & Company (NYSE:
WFC
) reported their earnings on Friday. JPM reported record
third-quarter profits beating analysts' estimates. The report was
boosted by revenue from mortgage lending and fixed-income capital
markets. However, Wells Fargo's revenue and net margins came in
below analysts' expectations. Mixed results from both the companies
have raised concerns about upcoming financial sector's
earnings.
The financial sector had a bad run and the Financial Select
Sector SPDR (ETF) dropped 1.3%. Stocks such as JPM, Citigroup Inc.
(NYSE:
C
), Goldman Sachs Group, Inc. (NYSE:
GS
), PNC Financial Services (NYSE:
PNC
) and Wells Fargo lost 1.1%, 2.2%, 1.5%, 2.8% and 2.6%
respectively.
Going ahead, investors will have their eyes fixed on earnings
results from Citigroup, Goldman Sachs, Intel Corporation (NASDAQ:
INTC
), Union Pacific Corporation (NYSE:
UNP
) and Verizon Communications Inc. (NYSE:
VZ
). So far, results from Alcoa, Yum! Brands and Safeway have been
mixed.
CITIGROUP INC (C): Free Stock Analysis Report
COSTCO WHOLE CP (COST): Free Stock Analysis
Report
DOLLAR GENERAL (DG): Free Stock Analysis Report
DOLLAR TREE INC (DLTR): Free Stock Analysis
Report
FREDS INC (FRED): Free Stock Analysis Report
GORDMANS STORES (GMAN): Free Stock Analysis
Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
Report
PNC FINL SVC CP (PNC): Free Stock Analysis
Report
PRICESMART INC (PSMT): Free Stock Analysis
Report
TARGET CORP (TGT): Free Stock Analysis Report
UNION PAC CORP (UNP): Free Stock Analysis
Report
VERIZON COMM (VZ): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
Report
WAL-MART STORES (WMT): Free Stock Analysis
Report
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