Sun, Aug 04, 2013 - Page 15 News List

US stocks see small gains during mixed, busy week

AFP, NEW YORK

A jam-packed week of economic data and corporate earnings amounted to only modest movement in US equities, as stocks closed out a hectic week of news on Friday only somewhat higher.

Belying any stereotypical notions about how the dog days of summer might mean a quiet period for economic news, the calendar this week had it all: the monthly jobs report, a US Federal Reserve monetary policy meeting, big-time corporate earnings and meetings by the EU and British central banks.

Both the Dow Jones Industrial Average and S&P 500 closed out the week at record highs, but neither gained significantly compared with the torrid gains posted earlier in the year. The Dow added 99.53 (0.63 percent) over the week, ending at 15,658.36, while the broad-based S&P 500 rose 18.02 (1.07 percent) to 1,709.67. The tech-rich NASDAQ Composite Index notched a more impressive rise, jumping 76.43 (2.12 percent) higher to 3,689.59.

Wednesday’s second-quarter US GDP report showed growth of 1.7 percent, better than the 1.1 percent expected by analysts. However, the report also included a steep downgrade in first-quarter GDP growth, which is now estimated at 1.1 percent instead of 1.8 percent.

Similarly, Friday’s all-important monthly jobs report showed unemployment fell from 7.6 percent to 7.4 percent last month. However, that promising figure was overshadowed by a weaker-than-expected addition of just 162,000 jobs.

The tepid economy is hardly a new thing for the equity markets. Nor is the Fed’s easy-money policy, which was essentially kept on autopilot this week. The Federal Open Market Committee’s statement on Wednesday described economic growth as “modest” and gave no specifics on when the Fed’s bond-buying program will be tapered, but sounded a bit less optimistic about the economic outlook.

The week’s corporate earnings also did not shatter the trend from the first part of earnings season, when the bulk of companies reported solid profit growth but feeble revenue figures.

That axiom held for both Pfizer Inc and Merck & Co. The two pharma giants exceeded expectations for profits, but fell short of expectations for revenues.

Profits for oil giants ExxonMobil and Chevron Corp came in well below expectations, but that disappointment was offset by solid figures from fellow Dow member Procter & Gamble Co. Overall, companies in the S&P 500 are on track to grow profits by 4.4 percent for the quarter and to see revenues decline by 0.76 percent, according to S&P Capital IQ.

The economic calendar for the first full week of the month is quiet. The Institute for Supply Management publishes its purchasing managers’ index on the services sector last month tomorrow.

This story has been viewed 1606 times.
TOP top