Stocks steady after two down weeks
NEW YORK — U.S. stocks inched higher Monday, as the Standard & Poor’s 500 index steadied following back-to-back losses the last two weeks.
This week may be a calmer one for the stock market, after an uncharacteristically bumpy stretch shook what had been a smooth ride higher for stocks this year. Few market-moving events are on the calendar this week, and the highlight will likely arrive when central bankers from around the world gather in Wyoming this week.
The modest moves were a return to form for the market. It’s had just four days this year where the S&P 500 has dropped by more than 1 percent, which is well below the typical number in recent decades. But half those instances occurred in the last two weeks, stoked by worries about discord in Washington and the potential for war abroad.
“One of the reasons the market has held in and performed well recently — although it’s wobbled a bit in the last two weeks — has been earnings,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust. “Without the earnings that we saw, it would have been a much more difficult period of time for the market.”
Companies are mostly done reporting their results for the spring quarter, and their growth in profits was stronger than analysts expected. Not only that, businesses also reported higher revenues. That’s encouraging given the struggles many companies have had in recent years to grow amid the still-sluggish global economy.
Cecilia said he sees few potential drivers that could move markets much in either direction in the coming weeks.
One potential highlight could be the gathering in Jackson Hole, Wyo., for central bankers, economists and policymakers. Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi are both expected to speak at the symposium, which begins Thursday.
Tremendous stimulus from central banks has been one of the main reasons for the stock market’s surge since the Great Recession.
But the Federal Reserve is slowly raising interest rates and preparing to pare back the vast trove of bonds that it bought after the 2008 financial crisis. Investors are wondering when the European Central Bank may follow suit.