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Weekly Wrap The major indices kicked off the week on a strong note, with the S&P 500 hitting fresh highs for 2009. But selling pressure eventually emerged, resulting in a mixed finish. Overall it was a relatively slow week, with earnings season winding down and a small amount of corporate news.
For the week, the S&P 500 fell 0.2% in mixed trade as six of the 10 sectors posted a loss. Tech (-1.4%) and consumer discretionary (-1.1%) underperformed, while healthcare (+1.9%) and materials (+1.4%) outperformed.
Retailers made up the bulk of the major companies to report earnings this week, a clear sign that third quarter earnings season is coming to end.
Of the 17 S&P 500 companies that reported earnings this week, 11 topped EPS estimates, two reported in-line results and four missed the consensus.
Among retailers, Target (TGT 47.46) posted upside EPS results ($0.58 versus the $0.50 consensus), while revenue came in-line with expectations.
TJX Cos (TJX 38.80), Limited Brands (LTD 17.25), Sears Holdings (SHLD 72.64) and Gap (GPS 21.95) all posted upside EPS results, while Lowe?s (LOW 21.35) posted in-line earnings.
In other notable earnings news, Dell (DELL 14.29) disappointed investors after its earnings ($0.23 versus $0.28 consensus) and revenue came up short of the consensus. Shares of Dell dropped 7.2% on the week despite the company saying that it is seeing improvement in overall underlying IT demand.
In economic news, initial claims met consensus expectations at 505,000, but was unable to drop below the 500,000 barrier. The labor market remains weak, with claims holding to a range between 500,000 and 515,000 since July.
The talk that housing starts were stabilizing hit a snag in October as new housing starts plummeted 10.6% to 529,000 units from 592,000. The consensus forecasted an increase in starts to 600,000.
October retail sales surged 1.4%, topping the +0.9% consensus on higher auto demand.
In currency trading, the dollar saw some substantial swings throughout the week, settling with a 0.4% gain, helped by supportive comments from Fed Chairman Bernanke that drove some buying interest. | Index | Started Week | Ended Week | Change | % Change | YTD % | | DJIA | 10270.47 | 10318.16 | 47.69 | 0.5 | 17.6 | | Nasdaq | 2167.88 | 2146.04 | -21.84 | -1.0 | 36.1 | | S&P 500 | 1093.48 | 1091.38 | -2.10 | -0.2 | 20.8 | | Russell 2000 | 586.28 | 584.68 | -1.60 | -0.3 | 17.1 |
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