US Stocks Ended Oct. 7, 2016

Bob Carey
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US Stocks Ended Oct. 7, 2016

Posted Under: Weekly Market Commentary

Last week the S&P 500 Index started October and the fourth quarter of 2016 in negative territory declining 60 basis points, following the previous three weeks of gains. Monday opened the new quarter down 31 basis points on some weak economic news. August construction spending fell though expectations were for a small increase and the Markit US Manufacturing PMI number came in at its lowest level since June 2016. Tuesday continued the trend declining another 49 basis points with futures markets implying that investors' expectations of a Federal Reserve rate hike by December increased relative to the previous week. Comments from regional Fed presidents drove these expectations, amplifying moves in rate-sensitive equities. The financials sector was the only sector with a gain. Wednesday turned the momentum with the S&P 500 Index returning 0.47%. The September ISM Non-Manufacturing Composite reported its highest level since October 2015 and August factory orders also increased. Thursday showed stocks down early, but rebounded close to even for a 5 basis point decline. Materials stocks were the big winners for the day while the health care sector led the losers. US initial jobless claims of 249K were lower than the consensus estimate of 256K and lower than the previous week's 254K. Stocks opened down on Friday as the S&P 500 Index tried to bounce back later in the trading day, but closed with a -0.32% return. Materials and industrials showed the largest declines with most sectors in negative territory. Crude oil closed the week at $49.81 a barrel, increasing 3.25% from the previous week's close. Nine of the ten economic sectors had negative performance for the week. The finanicals sector was the best performing sector with a 1.62% return. The energy and information technology sectors followed with -0.01% and -0.06% returns, respectively. The utilities sector's -3.81% return was the worst performance of all the sectors and was followed by telecommunication services and materials which returned -2.77% and -1.81%, respectively. The Gap Inc., an international specialty retailer operating retail and outlet stores, turned in the best performance in the S&P 500 Index with a 19.27% gain. Same store sales at The Gap Inc.'s Old Navy stores increased higher than expected giving a boost to the retail stock on Friday. The next two best performers were Signet Jewelers Ltd. and Netflix Inc. with returns of 7.43% and 6.36%, respectively.

Posted on Monday, October 10, 2016 @ 7:55 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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