US bulls took a breather this week, waiting for the data on the US economy to catch up with the recent surge, while keeping a cautious eye on a weakening growth picture in Europe and Asia.
Tech stocks held the NASDAQ up, but the Dow’s blue chips and the broader market slipped steadily during a week thin on US economic data and corporate news that might have sparked trading.
The Dow Jones Industrial Average ended the week down 1.14 percent at 13,080.73.
The broad-based S&P 500 also fell, losing 0.5 percent to 1,397.11, its first losing week after a five-week run higher.
However, the NASDAQ stayed above water, adding 0.41 percent for the week to finish at 3,067.92.
“Once more, the markets have proven that they can resist a mix of disappointing news,” Gregori Volokhine of Meeschaert New York said.
Poor growth indicators out of China and Europe kept a chill on the market, but the real cause for the slide was paucity of data that might have shored up the conviction that US growth is picking up.
Initial unemployment insurance claims fell again this week, confirming the firming in the jobs market.
However, other data showed that the housing sector remains deeply depressed. Both existing and new homes sales fell last month, surprising economists who predicted an improvement.
However, at the same time, prices in both sectors improved, suggesting that there is life in the business.
“Wall Street was subjected, once again, to hot-and-cold US housing data, which seemed to reflect the stop-and-start state of the US recovery,” Jim Cunningham of Schaeffer’s Investment Research said.
After starting lower on Friday’s poor new homes data, stocks turned up as economists argued that figures masked a real pickup in the sector.
“The underlying fundamentals, including historically high affordability levels on the sales side and historically low inventory numbers on the construction side, point toward steady improvement across both sectors of housing,” Jeffrey Rosen of Briefing Research said.
Analysts at Deutsche Bank said they expect economic figures in the upcoming week would confirm “that the economy is on the mend and that the longer-term economic outlook continues to improve.”
The data coming up in the week includes consumer confidence for this month on Tuesday; durable goods orders for last month on Wednesday; the final estimate for fourth-quarter economic growth on Thursday; the Chicago-area purchasing managers’ index and figures on personal income on Friday.
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