US Stocks Ended Feb. 9, 2018

Bob Carey
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US Stocks Ended Feb. 9, 2018

Posted Under: Weekly Market Commentary

The S&P 500 had a -3.82% return last week, the worst weekly return since January 2016. While equity returns were poor last week, the index still has a gain of over 3.4% for the year. Despite strong payroll and wage growth numbers, equity markets fell as some earnings announcements disappointed and the odds of a Fed rate hike grew. Earnings season was in full swing last week with 118 components of the S&P 500 announcing quarterly results. Apple Inc. saw its shares slide over 6% after the company announced lukewarm iPhone X sales. Apple also issued 2Q revenue guidance slightly below analyst expectations which increased concerns of slowing growth for the tech giant. Google's parent company Alphabet Inc., also had a 6% slip in price last week after they missed analyst earnings estimates due to rising costs of advertising and distribution along with increased marketing spend during the holiday season. United Parcel Service fell over 12% during the week on news that EBITDA margins continue to compress as peak shipping costs surged and on worries that a Unites States exit from NAFTA (North American Free Trade Alliance) might negatively affect their business. Not all earnings announcements were gloomy. Amazon.com Inc. saw its shares rise 2.8% after announcing its most profitable quarter ever. Amazon credited continued automation of their business as the primary way to keep costs down during the all-important holiday shopping season. Defense contractors Lockheed Martin Corp. and Boeing Co. both had earnings announcements that topped expectations which sent them both up over 1.5% last week while the market was down. In other equity news, Dr. Pepper Snapple Group, Inc., was up over 24% for the week after Keurig Green Mountain Inc. entered into an agreement to buy the beverage company for cash and stock. Looking ahead to next week, earnings season continues with over 90 constituents of the S&P 500 expected to report quarterly results.

Posted on Monday, February 12, 2018 @ 8:10 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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