S&P 500 has best week in two months, nears old highs
05/01/17

Last week came in with a bang and went out with a whimper, but it was still the S&P 500's best showing in over two months.

The index rose 1.5 percent between Friday, April 21, and Friday, April 28. Most of the gains came in the first two sessions as buyers embraced results from the French presidential election. Stocks then churned near old peaks as the market digested a flood of important headlines, although the Nasdaq-100 blasted into new record territory.

Most of the economic news was modestly negative. The Commerce Department said gross domestic product grew just 0.7 percent between January and March.1 While that missed forecasts by a wide margin and was the slowest reading since 2014, the bean counters have a history of revising this particular report upward in later updates. Durable goods orders, consumer confidence, and jobless claims also lagged estimates, the latter two of which remain near their best levels in over a decade.2

Earnings were a mixed bag. E-commerce heavyweights like Alphabet (NASDAQ: GOOGL) and Amazon.com (NASDAQ: AMZN) broke out following strong results, but other blue chips like Intel (NASDAQ: INTC), Starbucks (NASDAQ: SBUX), and Amgen (NASDAQ: AMGN) didn't fare so well. 

Medical-device maker C.R. Bard (NYSE: BCR) rallied 22 percent after accepting a $24 billion takeover offer from Becton Dickinson (NYSE: BDX), which made it the S&P 500's top performer. Under Armour (NYSE: UAA) took the runner-up spot with a 12 percent gain on better-than-expected quarterly results.

Consumer lender Synchrony Financial (NYSE: SYF), on the other hand, found itself at the bottom of the list after getting whacked 17 percent on weak earnings. Disk-drive maker Seagate Technology (NASDAQ: STX) was the second-worst name in the index, dragged down 13 percent by a revenue miss.

Health care and technology were the strongest sectors overall, with gains of about 2 percent. Real-estate investment trusts fell a similar amount, making them the worst major category.

S&P 500 6-month chart

Source: OptionsHouse by E*TRADE

In summary, it was a busy week but none of those headlines had much impact on the broad market. Don't forget we're still in the midst of an earnings season that analysts project will show the best profit growth in five years.3

The forward calendar remains active. Political news continues to flood in, as the White House and Congress work on the budget, Puerto Rico hopes for a bailout, and pundits wonder if health-care legislation will ever take shape. There are also key monthly economic reports and plenty more earnings. Here's a rundown of some highlights:

  • Today: The Institute for Supply Management's manufacturing index, plus personal income and spending. Earnings are due from Cardinal Health (NYSE: CAH) and Advanced Micro Devices (NASDAQ: AMD).
  • Tuesday: Earnings from Apple (NASDAQ: AAPL), MasterCard (NYSE: MA), and Pfizer (NYSE: PFE).
  • Wednesday: ADP's private-sector payrolls report and the Federal Reserve's interest-rate announcement. Earnings are due from Facebook (NASDAQ: FB).
  • Thursday: Initial jobless claims. 
  • Friday: Non-farm payrolls and monthly unemployment, plus speeches from Fed officials.

 

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1. Reuters: U.S. first-quarter growth weakest in three years as consumer spending falters. 4/28/17.

2. Marketwatch: Durable-goods orders rise in March to mark third-gain in a row. 4/27/17. Wall Street Journal: U.S. Consumer Confidence Falls, Conference Board Says. 4/25/17. RTT News: U.S. Weekly Jobless Claims Unexpectedly Rise To 257,000. 4/27/17.

3. FactSet: Earnings Insight. 4/13/17.