US stocks opened the week with a flourish and ended with a thud.
Monday’s trade saw the tech-rich NASDAQ Composite Index bolt above 5,000 for the first time in 15 years in a charge that also lifted the Dow and S&P 500 to fresh records.
However, the market spent the rest of the week playing defense, falling three of the four subsequent days, including a plunge on Friday on renewed concerns about tighter monetary policy.
For the week, the Dow Jones Industrial Average shed 275.92 points (1.52 percent) at 17,856.78, while the broad-based S&P 500 fell 33.24 (29.78 percent) to 2,071.26.
The NASDAQ dropped 36.16 (0.73 percent) to 4,927.37.
Analysts said the week’s losses suggested a market entering a “consolidation” phase after a torrid last month.
“This week, the market seems to have stalled out like an automobile that’s run out of gas,” said Hugh Johnson of Hugh Johnson Advisors. “The market has come very far, very fast in February and early March and it has become pricey and somewhat overvalued in the mind of many savvy professional investors.”
The surge early in the week was sparked by a stream of merger announcements, including the US$16.7 billion acquisition of Freescale Semiconductor Inc by NXP Semiconductor. Other deals on Monday involved Hewlett-Packard Co and Johnson & Johnson.
Market watchers were also cheered by a mid-week deal by pharma company AbbVie Inc to buy leukemia drug maker Pharmacyclics Inc for US$21 billion.
Much of the week’s economic data was mixed. US factory orders fell in January, while reports from the Institute for Supply Management showed slightly weaker growth in the manufacturing sector but slightly stronger growth in services.
The week’s most eagerly anticipated release, the jobs report for last month on Friday, was mostly a winner.
The US Department of Labor said the US economy added a robust 295,000 jobs last month, which sent the unemployment rate down to 5.5 percent from 5.7 percent in January, the lowest level since May 2008.
A negative in the report was a paltry 0.1 percent rise in hourly wages compared with January.
The better-than-expected jobs report sent US markets into a tizzy. The US dollar rose strongly, while US stocks plummeted as the market saw a greater likelihood that the US Federal Reserve will hike near-zero interest rates as early as June.
The week also closed with news of Apple Inc’s addition to the blue-chip Dow index this month, replacing AT&T.
S&P Dow Jones Indices said the shift would address the “overweight” share of telecommunications firms in the index and would better reflect the economy given Apple’s stature as the biggest company by market capitalization.
Apple will be back in the news tomorrow at a San Francisco event expected to launch the Apple Watch.
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