Stocks up slightly, en­joy 3rd straight week of gains

Pittsburgh Post-Gazette - - Weekend Perspectiv­es -

Wall Street closed out a choppy week of trad­ing with more of the same on Fri­day, as a late- af­ter­noon stum­ble led U. S. stock in­dexes to a mixed fin­ish.

The S& P 500 ended the day just a frac­tion of a point higher af­ter a burst of sell­ing erased a 0.9% gain. De­spite a three- day stretch of losses, the bench­mark in­dex still man­aged to fin­ish higher for the week, its third straight weekly gain.

Big Tech and en­ergy com­pa­nies fell while health care and in­dus­trial stocks rose. The Dow Jones In­dus­trial Av­er­age also eked out a gain, while the Nas­daq com­pos­ite posted its fourth straight loss. Trea­sury yields were flat.

The mar­ket had been up for much of the day af­ter the gov­ern­ment re­ported that re­tail sales rose in Septem­ber for the fifth straight month. That re­port ap­peared to over­shadow new data that showed U. S. in­dus­trial pro­duc­tion had its weak­est show­ing last month since the spring.

The mar­ket’s late- day fade capped a week of volatil­ity for stocks as com­pa­nies be­gan re­port­ing their third- quar­ter re­sults and traders’ hopes for a new round of eco­nomic stim­u­lus from Wash­ing­ton dimmed.

“The mar­ket is sort of bounc­ing around here,” said Tom Martin, se­nior port­fo­lio man­ager with Glob­alt In­vest­ments. “We’ve had a lot of noise lately and that’s prob­a­bly what we’re go­ing to have over the next cou­ple of weeks.”

The S& P 500 rose 0.47 points to 3,483.81. The Dow gained 112.11 points, or 0.4%, to 28,606.31. At one point, it had been up by 348 points. The Nas­daq fell 42.32 points, or 0.4%, to 11,671.56. The Rus­sell 2000 in­dex of small- cap stocks dropped 5.08 points, or 0.3%, to 1,633.81.

De­spite the mar­ket’s down­beat fin­ish, the ma­jor stock in­dexes have al­ready re­couped most of their losses from Septem­ber’s mar­ket swoon.

Stocks have been mostly climb­ing this month, but trad­ing be­came choppy this week as on­go­ing talks be­tween Democrats and Repub­li­cans on an eco­nomic stim­u­lus pack­age failed to de­liver re­sults. In­vestors have been hop­ing that Wash­ing­ton would pro­vide more fi­nan­cial sup­port for the econ­omy since July, when a $ 600- a- week ex­tra ben­e­fit for the un­em­ployed ex­pired.

Traders have been watch­ing eco­nomic data

closely to see whether the loss of that beefed- up un­em­ploy­ment aid would lead to an over­all pull­back in spend­ing. On Thurs­day, the gov­ern­ment said the num­ber of Amer­i­cans seek­ing un­em­ploy­ment aid in­creased last week to 898,000, a his­tor­i­cally high level that un­der­scores how the econ­omy con­tin­ues to be hob­bled by the pan­demic and re­ces­sion that erupted seven months ago.

Fri­day’s re­tail sales re­port pro­vides some en­cour­age­ment, sug­gest­ing Amer­i­cans’ ap­petite for spend­ing re­mained solid last month. The Com­merce Depart­ment said re­tail sales rose 1.9% in Septem­ber, the fifth straight monthly in­crease.

“There’s a need for stim­u­lus, even though this data is heart­en­ing in a way,” said Ross May­field, an in­vest­ment strate­gist at Baird.

Still, given that the Nov. 3 elec­tion is fast ap­proach­ing, the mar­ket is not ex­pect­ing lead­er­ship in Wash­ing­ton to de­liver an eco­nomic stim­u­lus pack­age be­fore vot­ers go to the polls, Mr. May­field said.

“Now, it’s es­sen­tially baked- in that we prob­a­bly won’t see any­thing un­til af­ter the elec­tion,” he said.

The re­tail sales re­port ini­tially juiced shares in re­tail­ers and other com­pa­nies that rely on con­sumer spend­ing, but most of those gains evap­o­rated by the end of the day.

Other data point to per­sis­tent weak­ness in the econ­omy. The Fed­eral Re­serve said Fri­day that U. S. in­dus­trial pro­duc­tion fell 0.6% last month, the weak­est show­ing since April’s 12.7% skid amid wide­spread busi­ness shut­downs due to the pan­demic. Econ­o­mists had been ex­pect­ing an in­crease.

A surge in new coron­avirus in­fec­tions in Europe,

the Amer­i­cas and parts of Asia is also giv­ing traders rea­son to turn cau­tious. The new caseloads prompted gov­ern­ments in France and Bri­tain to im­pose new re­stric­tions aimed on con­tain­ing the out­break and contribute­d to some of the sell­ing in the mar­ket ear­lier this week.

Across the S& P 500, an­a­lysts are ex­pect­ing com­pa­nies to re­port an­other drop in prof­its for the sum­mer from year- ago lev­els. But they’re fore­cast­ing the de­cline to mod­er­ate from the nearly 32% plunge from the spring, re­flect­ing some signs of im­prove­ment in the econ­omy since then.

An­a­lysts have been rais­ing their earn­ings fore­casts for how com­pa­nies fared in the third quar­ter a f t e r l o w e r i n g t h e m sharply ahead of the sec­ond quar­ter. That means it will be tougher for com­pa­nies re­port­ing re­sults the next cou­ple of weeks to beat ex­pec­ta­tions.

“Those ex­pec­ta­tions have been ris­ing all quar­ter,” Mr. May­field said. “There’s just go­ing to be a higher hur­dle to clear to im­press in­vestors.”

Credit card is­suer Ally Fi­nan­cial rose 2.7% af­ter it re­ported bet­ter- than- ex­pected re­sults. Lo­gis­tics com­pany J. B. Hunt Trans­porta­tion Ser­vices sank 9.7%, the big­gest de­cliner in the S& P 500, af­ter its thirdquar­ter re­sults fell short of an­a­lysts’ ex­pec­ta­tions.

Sev­eral big com­pa­nies re­port quar­terly re­sults next week, in­clud­ing Coca- Cola, Tesla, South­west Air­lines and Amer­i­can Ex­press.

The 10- year Trea­sury yield held steady at 0.74%.

Fri­day’s early gains on Wall Street fol­lowed a rally in Euro­pean stock in­dexes, which re­couped some of the losses from a day ear­lier. Asian mar­kets ended mixed.

Frank Franklin II/ As­so­ci­ated Press

The Amer­i­can flag hangs out­side the New York Stock Ex­change in New York on Wed­nes­day.

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