Wall Street took a breather this week, with changes in the major averages mixed and muted. Friday’s speech by Fed Chair Janet Yellen was mostly uneventful: A likely hike in interest rates sometime this year. The Fed continues to wrangle with mixed economic data as firmness in the job market and inflation worries are offset by sagging retail sales, softness in industrial activity and slow GDP growth. Thus the Dow Jones Industrials lost 41 points on the week, or 0.2% after reaching a record high on Tuesday. The S&P 500 Index was virtually flat and the NASDAQ was higher by about 1%. Friday saw some last-minute selling pressure ahead of the long Memorial Day weekend with markets closed on Monday. Gold prices gave up most of what it gained last week falling to $1,204.30/oz. and crude oil moved sideways. The various market sectors were also mixed with nice gains in healthcare and technology equalized by weakness in energy and basic materials. Dow Theory followers are getting restless with transportation stocks not following through with the upward bias of the markets in general; the premise being transports need to confirm the trend. If the economy is indeed growing, then goods need to be delivered by truck, rail and air. However, the transports outperformed most averages ahead of the overall market trend and stocks representing the transportation industry are probably adjusting downward accordingly. Also, the economy is becoming more and more service oriented and the Dow Theory may not be as accurate as it once was. Time will tell.
This past week we saw a major acquisition by CVS Health bidding for Omnicare and entering the long-term care drug dispensing market and widening its presence in filling specialty prescriptions; two of the fastest growing segments of the pharmacy industry. Foot Locker and Deere & Co. surprised to the upside, but Deere is far from out of the woods through the rest of this year and next with agricultural commodity prices in a free-fall. JPMorgan Chase kept its April promise to raise its dividend by 10% and, barring any missteps at JPM, dividends should continue to move higher commensurate with earnings improvement. Looking ahead at the holiday shortened week, will see some numbers from new home sales and durable goods orders for April and a revision to the GDP first quarter reading on Friday.
Here is the answer to last week’s trivia question: The enviable NYSE ticker symbol “X” belongs to which company: Xerox, United States Steel, Xilinx or Chevron? Answer: United States Steel Corporation.
Today’s Trivia Question: Foot Locker, Inc., the specialty athletic shoe and apparel retailer, was originally what company? Dayton-Hudson, Herman’s World of Sporting Goods, F.W. Woolworth Co., or Oshman’s Sporting Goods?