The S&P 500 settled into a sideways trend, drifting alongside its unchanged mark, as investors lacked conviction to decisively move the market one way or the other. In the end, the benchmark index sealed its second-consecutive weekly win with a slim gain of 0.2%.
Wall Street kicked off the week on a positive note with both the S&P 500 and the Dow advancing to new all-time highs. The Nasdaq exhibited relative strength as technology and biotechnology stocks outperformed, bucking their recent bearish trends. Financials also posted a solid performance, continuing their bullish two-week run.
The tide turned on Tuesday as the benchmark index coughed up nearly all of Monday’s advance. The energy sector finished at the bottom of the leader-board, for the second day in a row, as crude oil continued to tumble amid excess supply concerns.
Range-bound action set in on Wednesday as the heavily-weighted health care and technology sectors upheld the S&P 500 amid weakness in the broader market. Staying true to the week’s trend, biotech companies were bullish, advancing the IBB higher by 4.1%, while crude oil was bearish, dropping another 2.3%, despite a relatively upbeat inventory report from the Department of Energy.
Investors shifted their attention to Washington on Thursday as the Senate rolled out its version of the healthcare reform bill. Compared to the version that the House passed last month, the Senate’s version would roll back the Affordable Care Act’s Medicaid expansion more gradually, but the cuts to Medicaid would be larger in total. However, in general, the two versions of the bill are very similar.
Equities ended the week on a positive note as the technology and energy sectors fended off the negatively-charged financials, consumer discretionary, and health care groups. Biotech stocks fell to some profit-taking efforts early, but the IBB still managed to pull out a win, ending the week higher by 9.6%. Crude oil registered another modest win on Friday, but ended the week lower by 4.0%.
Market participants altered their rate-hike expectations a bit this week following comments from several FOMC voters. The fed funds futures market now points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 51.3%, up from last week’s 43.4%.
Source: Briefing Investor