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On Friday, major indices closed in the red after the Consumer Sentiment index dropped unexpectedly in the month of March. The Dow Jones ended its longest winning streak in almost seventeen years. A bunch of economic reports was released on Friday. Industrial production surged in February whereas manufacturing activity in New York State calmed slightly. The utilities sector was the major gainer among the S&P 500 industry groups. Consumer staples stocks were the biggest loser.

The Dow Jones Industrial Average (DJI) lost 0.2% to close the day at 14,514.11. The S&P 500 fell 0.2% to finish Friday’s trading session at 1,560.70. The tech-laden Nasdaq Composite Index declined 0.3% to end at 3,249. The fear-gauge CBOE Volatility Index (VIX) was unchanged on Friday at 11.30. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 8.2 billion shares, significantly higher than 2012’s daily average of 6.45 billion shares. Declining stocks outnumbered the advancers. For the 46% that advanced, 50% declined.

The blue-chip index gained 0.8%, S&P 500 inched up 0.6% and Nasdaq increased 0.2% over the week. The Dow ended in the red after ten consecutive days of gains. The rally was driven primarily by the Federal Reserve’s attempts to keep interest rates at a record low level. The improving employment scenario and better-than-expected retail sales data also boosted investor sentiment. Investor optimism about the world’s largest economy has pushed the volatility index to its lowest level in more than six years.  

Friday’s trading session was largely affected by a sharp decline in the consumer sentiment index. According to preliminary estimates, consumer sentiment sharply declined to 71.8 in March from previous month’s reading of 77.6. This was also well below the consensus estimate of 77.2. The consumer sentiment index has touched its lowest level since December 2011. Most US citizens believe government spending cuts of $85 billion will hamper the growth of the economy.   

Meanwhile, industrial production increased 0.7% in February after remaining unchanged in January. This was above the consensus estimate of 0.4%. Manufacturing and utilities output increased 0.8% and 1.6% respectively.  But production at mines fell 0.3%, its third consecutive month of decline. On the other hand, manufacturing conditions in New York changed slightly as the general business conditions index came in at 9.2 in March from the previous month figure’s of 10. This was below the consensus estimate of 10.67. The general business conditions index was positive for the second consecutive month.

Another report was released on the domestic front, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.7% in February beating the consensus estimate of 0.5%. The gasoline index jumped 9.1% in February. The food index inched up 0.1% in February after remaining unchanged in January.

The utilities sector had a good run and the Utilities SPDR (XLU) gained 0.7%. Stocks such as Public Service Enterprise Group Inc. (NYSE:PEG), The Southern Company (NYSE:SO), American Electric Power Company, Inc. (NYSE:AEP), Exelon Corporation (NYSE:EXC) and Entergy Corporation (NYSE:ETR) added 1.0%, 0.3%, 0.5%, 2.8% and 2.5%, respectively.

The Consumer Staples Select Sect. SPDR (XLP) lost 0.3%. This sector was the biggest loser among the S&P 500 industry groups. Stocks such as The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), Wal-Mart Stores, Inc. (NYSE:WMT), PepsiCo, Inc. (NYSE:PEP) and Altria Group Inc (NYSE:MO) fell 1.4%, 0.5%, 1.0%, 0.2% and 0.4%, respectively.
 

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