It was a lackluster first four days of trading on Wall Street, with equities moving in and out of positive territory throughout most of the week. A late day push on Friday moved the averages into more positive territory, with the S&P 500 and the NASDAQ hitting new all-time highs. The Dow couldn’t fully participate in Friday’s rally, held back by weakness in IBM. For the week, the Dow Industrials climbed by 66 points or 0.32% and the S&P moved higher by twice that and the NASDAQ by nearly one percent and most market sectors made progress. There were sizable gains in technology and transports, offset by some weakness in the telecom and energy areas. Oil stocks were mostly positive on Friday, but crude oil fell another $3.00/bbl. for the week to $46.22.
The Federal Reserve, as expected, left short-term rates alone following their Wednesday meeting, but is still on track for a few more increases throughout the year. The economy added 211,000 new jobs in April, a nice bounce from a lackluster March report and the unemployment rate fell to a ten-year low at 4.4%. Looking out, it will be a mostly quiet week on the economic front with consumer prices and April retail sales on the calendar for Friday. And, except for retailers, earning’s season is coming to an end.
Investors continue to hang in, encouraged by the constructive tone of early second-quarter business trends and the continued support from strong corporate earnings and full-year guidance. Progress on the legislative front would further inspire the bulls, thus the case for equities remains solid. But as averages strengthen, valuations and the attendant risks in the market also continue to rise.
Here is the answer to last week’s trivia question: Chase Manhattan Bank (now JPMorgan Chase & Co,) was acquired by what other bank in 1996? Manufacturers Hanover, New York Trust Co., Irving Bank Corp. or Chemical Bank. Answer: Chemical Bank. Although smaller Chemical was the nominal survivor, it took the better-known Chase name. The combined company later merged with J.P. Morgan & Co. in 2000 to form JPMorgan Chase.
Today’s Trivia Question: The ticker symbol “ICE” belongs to what company? Reddy Ice Holdings, Icelandair Group, Intercontinental Exchange, Inc. or Friedrich Air Conditioning Co.