Market Snapshot: U.S. Stocks Post Second Weekly Gains
U.S. stocks managed to stay in positive territory today without any catalyst to move them higher. This week’s advance in the three major indices marks the second weekly gains following three weeks of losses triggered by concern that the European debt crisis will derail global recovery. Despite the fact that today four types of options and futures expired, it did not impact market volume and volatility. In fact, VIX fell 4.8% today to 23.85 from 25.
The Dow edged up 0.16% for the day and 2.3% higher for the week. Basic materials (up 1%), and industrials (up 0.81%) led the advance in six sectors in the index. Industrials advanced on the strength of Caterpillar Inc., whose shares rose 1.4% to $6.80 on reporting an 11% m/m increase in May retail sales with the strongest growth of 38% m/m coming from Asia. Four sectors ended the day in the red: health care, consumer goods, technology and telecom.
The S&P 500 rose 0.13% for the day and up 2.4% for the week. Six out of ten sectors finished in positive territory with basic materials (up 0.68%), and energy (up 0.6%) leading the advance. On the flip side, the biggest laggard was telecom, which was down by 0.36%.
CVS and Walgreen shares rallied today on the news that the two companies were able to reach an agreement under which Walgreen will remain in CVS Caremark’s pharmacy-benefit-management network. The agreement was crucial for both companies to avoid a sharp decline in sales and disruption in filling prescriptions. CVS shares were up 1.85% to close at $32.43 and Walgreen shares jumped 2.8% to $30.09.
In Canada, the S&P/TSX composite index fell 0.15% for the day, however, finished 2.2% higher for the week. Today’s loss was due to decline in natural gas prices and a downbeat forecast for potash prices. The only advancer was basic materials (+0.66%), while the rest of the sectors were in the red with tech down 1.95%, being the largest laggard for the day.
In Europe, European markets responded positively to the E.U. leaders’ initiative to disclose bank stress test results seen as a vote of confidence in the health of the banking sector. Other positive news came from Greece, which was reported to show signs of progress in meeting strict requirements stipulated in the bailout package. Earlier this week, Spain’s successful bond auction also supported investors’ sentiment. Though Friday’s market actions produced mixed results for European major bourses, they still managed to post strong weekly gains. The German DAX was down 0.11%, but up 2.2% for the week; the French CAC 40 rose 0.1%, and up 3.7% for the week; the London FTSE 100 was down 0.06% but up 1.7% for the week; the Spanish IBEX 35 was up 2.2% and up 4.3% for the week; and in Italy, the FTSE MIB Index rose 0.89%, closing the week up 5.5%.
Into close, the S&P 500 index rose 1.40 points or 0.13% to close at 1,117.44.
The Dow gained 16.62 points or 0.16% to close at 10,450.79.
The tech-heavy Nasdaq composite index was up 2.64 points, or 0.11% to close at 2,309.80.
Treasurys prices fell with the yield on the benchmark 10-year Treasury note up yielding 3.22%, up from 3.19% late Thursday.
In commodity markets, gold futures posted a record gain benefitting from continued uncertainty in risky asset markets. Gold futures for August delivery, the most actively traded contract, settled $9.60 or 0.8% higher at $1,258.30 an ounce. It hit an intraday record of $1,263.70.
Light crude for July delivery settled 39 cents higher at $77.18 a barrel on the New York Mercantile Exchange. The August contract, which will take over Wednesday as the front month, settled 22 cents higher at $78.26 a barrel following a four-day rally.
In currency markets today the euro rose against the dollar posting the biggest weekly gain.
In currency, EUR/USD traded at 1.2391, up from 1.2383 late on Thursday in New York, Cable was quoted at 1.4827, up from 1.4815. USD/JPY traded at 90.69, down from 90.99. USD/CHF was at 1.1083, down from 1.1121, while USD/CAD was quoted at 1.0215, down from 1.0282.
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