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Energy and basic materials took the benchmarks modestly higher on Friday, snapping a three-day losing streak. However, meager gains failed to prevent the Dow and S&P 500 from suffering their worst weekly performance this year. Global economic concerns weighed on investors through the week and their influence carried onto Friday. Moreover, tepid housing data made matters worse on Friday, limiting gains.

On Friday, the Dow Jones Industrial Average (DJI) gained 0.3% and closed the day at 13,080.73. The Standard & Poor 500 (S&P 500) was also up 0.3% and finished Friday’s trading session at 1,397.11. The tech-laden Nasdaq Composite Index edged up 0.1% and settled at 3,067.92. The fear-gauge CBOE Volatility Index (VIX) lost 4.8% and closed at 14.82. Consolidated volumes on the New York Stock Exchange, NYSE Amex and Nasdaq were roughly 5.9 billion shares, lower than this year’s daily average of 6.84 billion. Advancers outnumbered the decliners on the NYSE by a ratio of 12:5.

On Friday, crude-oil futures for May gained 1.4% following a report which revealed that Iranian oil exports had declined by 300,000 barrels per day in March, sparking off widespread concerns about fuel supply. This helped the energy sector move up and the Energy SPDR Select Sector Fund (XLE) gained 1.1%. Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP), Marathon Oil Corporation (NYSE:MRO), Valero Energy Corporation (NYSE:VLO), Western Refining Inc. (NYSE:WNR) and Devon Energy Corporation (NYSE:DVN) gained 1.0%, 0.8%, 0.7%, 1.0%, 2.8% and 1.7%, respectively.

Alongside the energy sector, materials also chalked up and both these sectors contributed towards the broader rally. The Materials Select Sector SPDR (XLB) gained 1.15 and stocks including E.I. du Pont de Nemours (NYSE:DD), Freeport-McMoRan Copper & Gold (NYSE:FCX), The Dow Chemical Company (NYSE:DOW), Newmont Mining Corporation (NYSE:NEM) and Cliffs Natural Resources (NYSE:CLF) were up 0.8%, 0.4%, 1.6%, 1.7% and 2.5%, respectively.

On a day of low volumes, markets struggled to find any other catalyst that could help them move higher. On the economic front, housing data was dismal and guided the benchmarks lower during the morning session. In a joint release by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses dropped 1.6% from the revised January rate of 318,000 to a seasonally adjusted annual rate of 313,000 in February. This was an instant drag on the housing sector and the Homebuilder SPDR Series Trust (XHB) dropped 0.5%. Stocks including Toll Brothers Inc. (NYSE:TOL), Lennar Corporation (NYSE:LEN), Beazer Homes USA, Inc. (NYSE:BZH) and Hovnanian Enterprises, Inc. (NYSE:HOV) plunged 0.8%, 1.0%, 4.8% and 1.1%, respectively.

Through the week, signs of a global economic slowdown also caused enough damage to the benchmarks. Investor sentiment was jolted by a contraction in manufacturing activity in Europe while manufacturing shrunk for the fifth-consecutive month in the second largest economy, China. On Thursday, the Chinese manufacturing index, which is compiled by HSBC, dropped to a four-month low of 48.1 in March, down from 49.6 in February. Separately, both Germany and France reported lower-than-expected manufacturing data. Earlier, on Tuesday, an executive from BHP Billiton Limited (NYSE:BHP) had said that the demand for iron-ore from China is seeing a “flattening” trend. Following the comment, there was widespread concerns about softening economic growth in the world’s second largest economy.

Thus, a dismal week saw the benchmarks end on a losing note, which is rare. The Dow and S&P 500 lost 1.1% and 0.5%, respectively, for the week, while the Nasdaq gained 0.4%. The Dow suffered its worst week since the start of this year, and the S&P 500 posted its worst weekly results since last December.

However, while the Dow and S&P 500 suffered weekly losses, the Nasdaq managed to hold onto its gains. On most of the past trading days, the Nasdaq has outperformed the other benchmarks. On Monday in particular, the Nasdaq was boosted by an event that also played a role in sparking off the broader rally. Apple Inc. (NASDAQ:AAPL) settled over $600 a share on Monday, for the first time in its history. Apple announced a quarterly dividend of $2.65 per share, to be paid in the fourth quarter. Additionally, the company announced a three-year share buyback plan worth $10 billion, which will begin in fiscal 2013. On Wednesday, when Dow and S&P 500 settled in the red zone, Nasdaq alone finished in the green.

 

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