While the averages managed to lose some ground this week, the retreat was mostly held in check with the exception of some of the high-flying social media stocks like LinkedIn and Twitter, both falling about 20%. And the once touted 3D printing stocks like 3DSystems hit a new 52-week low, off 10% and Stratasys down over 14 points to $36.71, also a new yearly low. All four issues suffering from high expectations that failed to materialize. The rout affected the rest of the market in mid-week, but a rally on Friday help take the edge off equities that had been down 2% at one point. In all, the Dow Industrials lost 56 points or 0.31% and the S&P fell by 0.44%. But the tech-laden NASDAQ retreated 1.7% and the mid-cap Russell 2000 by over 3%. On the Big Board, decliners outnumbered advances 2 to 1, and new 52-week lows doubled last week’s tally to 91 issues. Oil prices moved higher on the week to $59.15.bbl., helping basic material and energy related stocks which were the top performers ahead by 1.6% and 1.25%, respectively. Healthcare, especially the biotech names, was the weakest group with an average decline of over 2.5%. While strong-dollar earnings misses and lower guidance were partly to blame, the first quarter GDP number was no help, with the seasonally adjusted rate rising just 0.2%, well below consensus estimates of 1% and compared to the 2.2% pace for the fourth quarter of last year. Along with slowing GDP, weakness in the labor market will probably cause the Federal Reserve to pass on a rate hike at the June meeting. With the height of the earnings season now over, the beginning of the week may tread water until Friday’s nonfarm payroll numbers are released and the expectation of an unemployment rate ticking lower to 5.4%.
Congratulations to Floyd Mayweather on his defeat and American Pharoah’s win at the Derby.
Here is the answer to last week’s trivia question: What do these product brands have in common: Murphy’s Oil Soap, Tom’s of Maine and Hill’s Science Diet Pet Food? Answer: They are all products of conservative choice Colgate-Palmolive Co.
Today’s Trivia Question: Which of the following companies is not a component of the S&P 500 Index? Under Armor, Eastman Chemical, Avon Products?