U.S. Stocks Snap Two-Week Losing Streak
May 26 2017 - 4:42PM
Dow Jones News
By Riva Gold and Corrie Driebusch
The S&P 500 snapped a two-week losing streak, though major
indexes were little changed Friday.
Stocks have risen on stronger-than-expected first-quarter
earnings, continued signs of a steady economy and expectations that
the Federal Reserve will only raise rates gradually.
The S&P 500 hit its 20th record of the year Friday and
closed the week up 1.4%, its biggest weekly gain since the end of
April.
"We've had a strong start to the year, but the question is: is
this the calm before the storm?" said Allen Bond, portfolio manager
of the Jensen Quality Growth Fund, which manages just over $5
billion.
While the market is looking expensive and there may be better
opportunities overseas, low volatility and investor confidence
suggest there might be a bit further for the market to climb, some
analysts and fund managers said.
Mr. Bond said he believes recent data points to healthy if not
robust economic growth, and that, along with solid earnings, makes
him optimistic about where stocks are headed.
The Dow Jones Industrial Average edged down 2.7 points, or less
than 0.1%, to 21080 on Friday. The S&P 500 and the Nasdaq
Composite rose less than 0.1%.
An unlikely combination has led gains this week: shares of
utilities companies and technology firms. Both sectors in the
S&P 500 gained more than 2% during the week.
Tech shares are up 20% so far this year, as investors have
scooped up companies that have outperformed the broader market in
the years since the financial crisis.
Amazon.com, though classified in the S&P 500 as a consumer
company, has risen alongside big tech companies, and its stock
traded within a few dollars of $1,000 on Friday. Its price has
soared from around $68 apiece a decade ago, a sign not only of the
company's growth, but also how fewer companies are choosing to
"split" their stocks to boost the number of shares and lower
prices.
Utilities companies, often referred to as bond proxies because
of their steady dividend payments, also have climbed as inflation
expectations have moderated.
Separately, energy shares were the biggest losers over the past
week, as the price of oil dropped. U.S.-traded crude oil climbed
1.8% to $49.80 a barrel, but is still on track to end the week down
more than 2%.
Oil prices declined earlier this week on disappointment that the
Organization of the Petroleum Exporting Countries didn't take more
aggressive measures to cut production at a meeting in Vienna.
Although OPEC members agreed to extend production cuts through
March 2018, "the market had been speculating in deeper cuts and a
longer commitment," said Martin Enlund, analyst at Nordea.
Energy stocks in the S&P 500 closed 2.1% lower on the
week.
The Stoxx Europe 600 declined 0.2% Friday, ending the week down
less than 0.1%.
In Asia, Japan's Nikkei rose 0.5% in the past week, and South
Korea's Kospi Composite Index and India's Sensex rose to fresh
records.
Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at
corrie.driebusch@wsj.com
(END) Dow Jones Newswires
May 26, 2017 16:27 ET (20:27 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.