The stock market faced some selling pressure during the second full week of January, but not before the Dow and Nasdaq reached fresh record highs. The two indices surrendered a respective 0.9% and 1.5% for the week while the S&P 500 also lost 1.5%. Small caps outperformed notably, allowing the Russell 2000 (+1.5%) to finish the week with a gain.
The S&P 500 spent the first three days of the week in a slow crawl toward its record from January 8 while the Dow and Nasdaq rose to fresh records. High-beta names were particularly impressive, as the PHLX Semiconductor Index gained 1.9% while the iShares Nasdaq Biotechnology ETF (IBB) climbed more than 2.0% for the week.
High-beta stocks and small caps remained ahead even as the broader market faced some pressure on Thursday and Friday. The losses were concentrated in some of the biggest components like Apple (AAPL), Facebook (FB), and Amazon (AMZN) while less influential names and stocks that stand to benefit from commodity inflation outperformed.
The energy sector fell 4.0% on Friday, but it still gained 3.1% for the week, extending its January advance to 12.7%.
The Q4 reporting season was kicked off on Friday with better than expected earnings from Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC).
Fed Chairman Powell reiterated on Thursday that the fed funds rate will not be raised for a long time.
Source: Briefing Investor