By Sue Chang and Anora Mahmudova, MarketWatch
Gap slumps on weak sales; Alcoa drops after downbeat results
The S&P 500 posted its best weekly gain of 2015, while the
Dow Jones Industrial Average notched its best week since early
February, as U.S. stocks closed a rocky session on Friday with
modest gains.
Friday's up-and-down trading follows days of global
equity-market rallies, in part fueled by a sharp rebound in
commodity prices.
Frank Cappelleri, executive director of institutional equities
at Instinet LLC, noted that the last upswing between Aug. 26 to
Sept. 17 included three separate days where the market gained at
least 2%.
"We have yet to get a 2% daily advance this time. But that's not
necessarily a bad thing. A bigger collection of advances, even
smaller ones, is more representative of a healthy uptrend, as
opposed to one or two extremely large trading sessions," Cappelleri
said.
All three indexes posted two straight weeks of gains with the
S&P 500 edging up 1.46 points to close at 2,014.89 for a weekly
rally of 3.3%. Information technology stocks led the gains, while
energy and telecommunications services sectors were the biggest
losers.
The Dow Jones Industrial Average rose 33.74 points, or 0.2%, to
finish at 17,084.49, to record its second best week of the year.
The Nasdaq Composite climbed 19.68 points, or 0.4%, to
4,830.47.
"An overall positive take on the economy from the Fed, combined
with the poor jobs report, suggests that while rates may remain low
for a while, the downside risk is limited," said Bradford McMillan,
chief investment officer at Commonwealth Financial Network
Still, comments from Dennis Lockhart, president of the Atlanta
Fed, that a rate increase in October or December is a possibility
may have discouraged some investors from actively buying, he
said.
So far, earnings have been lackluster, with Alcoa Inc. (AA)
posting disappointing results after the close of trading on
Thursday.
The aluminum producer said it now expects 2015 automotive
production growth in China to be in the range of 1% to 2%
(http://www.marketwatch.com/story/alcoa-slashes-it-outlook-for-chinas-production-of-cars-heavy-duty-trucks-2015-10-08),
down from a previous outlook of 5% to 8% growth. Shares were off
6.8%.
This week's stock-market advances came after Fed minutes showed
officials were reluctant to raise interest rates due to global risk
concerns.
On the data front, U.S. import and export prices dipped in
September
(http://www.marketwatch.com/story/us-import-prices-dip-slightly-in-september-2015-10-09),
underlying continued weakness in demand. The prices the U.S. paid
for imported goods fell by a seasonally adjusted 0.1% in September,
much smaller than the 1.6% plunge in the prior month, the
government said Friday. The price of U.S.-made goods exported to
other nations declined by 0.7% last month.
The markets are likely to be driven by corporate earnings next
week, said Myles Clouston, a senior director at Nasdaq. "Investors
will be looking to see how slowing global growth impacted
bellwethers," he said.
Among large caps and blue chips slated to release results are
J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C), General
Electric Co. (GE), Netflix Inc. (NFLX), and Johnson & Johnson
(JNJ) and Intel Corp. (INTC).
Stocks to watch: Shares of Gap Inc. (GPS) sank more than 5.3%
after the fashion retailer reported late Thursday
(http://www.marketwatch.com/story/gap-reports-downbeat-outlook-sept-sales-drop-2015-10-08)
that total sales fell 1% in September, hit by a stronger dollar and
weakness for its Banana Republic unit.
Tesla Motors Inc.(TSLA) dropped 2.7% after Barclays downgraded
shares of the company.
Shares of International Paper Co. (IP) climbed 5.2% after it
announced late Thursday is plans to sell its 55% stake in a joint
Venue in China.
Read: Elon Musk: Here's why we call Apple the 'Tesla graveyard'
(http://www.marketwatch.com/story/elon-musk-heres-why-we-call-apple-the-tesla-graveyard-2015-10-09)
Other markets:Asian shares rallied
(http://www.marketwatch.com/story/asian-markets-rise-after-fed-minutes-cast-doubt-on-rate-hike-2015-10-09)
in the wake of the Fed minutes and hopes for lower U.S. rates for
longer. The Shanghai Composite Index closed up 1.3%, while the
Nikkei 225 index gained 1.6%.
European stocks
(http://www.marketwatch.com/story/european-stocks-climb-for-sixth-day-after-dovish-fed-minutes-2015-10-09)
were also enjoying gains, driven by commodity-related stocks.
A weaker dollar
(http://www.marketwatch.com/story/dollar-steadies-in-wake-of-dovish-tone-out-of-fed-minutes-2015-10-09)
propelled crude oil
(http://www.marketwatch.com/story/oil-atop-50-as-dollar-falls-market-eyes-possible-producer-collaboration-2015-10-09)
higher with West Texas Intermediate crude-oil prices rising 0.4% to
$49.63 a barrel. Gold prices climbed
(http://www.marketwatch.com/story/metals-rally-after-as-us-rate-hike-expectations-fade-2015-10-09)
$11.60, or 0.1%, to $1,155.90 an ounce--its highest settlement
since Aug. 21.
--Barbara Kollmeyer contributed to this article.
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(END) Dow Jones Newswires
October 09, 2015 17:10 ET (21:10 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.