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Benchmarks ended flat on Friday as investors were unwillingly to take positions ahead of earnings reports from major companies. But benchmarks still finished in the green for the second consecutive week. The S&P 500 is a fraction below its second highest level, achieved last Thursday in more than five years. The consumer staples sector was the biggest gainer whereas the industrial sector was the major loser among the S&P 500 industry groups.
The Dow Jones Industrial Average (DJI) gained 0.1% to close the day at 13,488.43. The Standard & Poor 500 (S&P 500) slipped marginally, by 0.07 point to finish Friday’s trading session at 1,472.05. The tech-laden Nasdaq Composite Index surged 0.1% to end at 3,125.64.The fear-gauge CBOE Volatility Index (VIX) lost 1.0% to settle at 13.36. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.93 billion shares, significantly lower than 2012’s daily average of 6.42 billion shares. Advancing stocks outpaced decliners on the NYSE; as for 49% stocks that rose, 47% moved lower.
The blue-chip index gained 0.4%, S&P 500 surged 0.4% and Nasdaq added 0.8% over the week. Benchmarks declined during the first two trading days in the previous week as investors were concerned about fourth-quarter corporate earnings. But in the later part of the week all major indices gained, propelled higher by an encouraging start to the earnings season and a positive outlook from Alcoa Inc. (NYSE:AA). Encouraging reports from China and Europe also boosted investor confidence and helped the S&P 500 achieve its second highest level since December 2007.
The first major financial company, Wells Fargo & Company (NYSE:WFC) reported its quarterly results on Friday. The company’s profits came in above the Street’s estimates and revenues were in line with analyst estimates. The company’s profits increased 25% in the fourth-quarter. However, shares declined 0.8% following the results. Investors were worried about the net interest margin which declined during the fourth-quarter. The company also made less money from its mortgage business compared to the third-quarter.
Financial stocks declines after Wells Fargo’s results. The Financial Select Sector SPDR (XLF) declined 0.2%. Stocks such as JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS), PNC Financial Services (NYSE:PNC) and U.S. Bancorp (NYSE:USB) lost 0.02%, 1.1%, 0.2%, 1.1% and 0.4%, respectively.
After Wells Fargo, the Street will receive a batch of reports from other major financial companies this week. JPMorgan Chase, Citigroup, Bank of America Corp (NYSE:BAC) and Goldman Sachs Group are slated to report their quarterly results. Last year, the financial sector was the best performing sector among the S&P 500 industry groups and surged 26%. Analysts are expecting that fourth-quarter earnings will come in above the previous quarter’s paltry growth of 0.1%.
The trade deficit move up to $48.7 billion in November from the revised October figure of $42.1 billion. This was above consensus estimates of $41.5 billion. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis said November exports were recorded $1.7 billion more than October exports of $180.8 billion whereas imports increased $8.4 billion more than October imports of $222.9 billion.
The consumer staples sector had a good run yesterday and the Consumer Staples Select Sect. SPDR (XLP) gained 0.5%. Stocks such as Wal-Mart Stores, Inc. (NYSE:WMT), PepsiCo, Inc. (NYSE:PEP), Kraft Foods Group Inc (NASDAQ:KRFT), Walgreen Company (NYSE:WAG) and Altria Group, Inc. (NYSE:MO) surged 0.4%, 0.1%, 0.8%, 1.4% and 0.7%, respectively.
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