S&P breaks winning streak as oil retreats

The S&P 500 took a breather last week following a month of record highs.

The index fell 0.47 percent between Friday, March 3, and Friday, March 10. It was the first weekly decline since mid-January, and weak sectors dropped much more than the outperforming areas rose.  

Real-estate investment trusts led to the downside with a loss of 3.6 percent as higher interest rates reduced the appeal of their dividend payments, and investors braced for a wave of retail-store closings. Energy stocks also slid 2.9 percent after a record inventory glut sent the crude oil to its lowest levels since late November.

On the sunnier side, many economic headlines remained upbeat. Job reports from the U.S. Labor Department and payroll processor ADP surpassed estimates by wide margins, while Chinese trade data reflected unexpected strength in the Asian giant. There were also positive reads on housing, with Fannie Mae citing the best sentiment since 2011 and analysts at Barclays predicting strong orders this spring.

Technology rose 0.5 percent last week, making it the S&P 500’s best major sector. The gains were mostly led by semiconductor makers amid the strongest chip sales in over six years. Health care also eked out a fractional gain.

H&R Block (NYSE: HRB) was the best-performing single stock in the index, rising 13 percent after results topped estimates. Signet Jewelers (NYSE: SIG) also climbed eight percent on strong profit. Both HRB and SIG have lagged the broader market by a wide margin since the start of last year.

Deepwater oil driller Transocean (NYSE: RIG) led the downside with a nine percent drop. Shopping-center owners Regency Centers (NYSE: REG) and Kimco (NYSE: KIM) were also near the bottom of the rankings.

Another noteworthy development last week was the euro’s sharp gain amid signs policymakers in Frankfurt are moving away from years of super-low interest rates. 

The main event on the forward calendar is the Federal Reserve’s meeting on Wednesday afternoon, which many expect to bring the third interest-rate increase since the 2007-2008 financial crisis. (Check back here Wednesday for our take on what it means.) Retail sales are due Wednesday morning as well, followed on Thursday by housing starts and building permits. Politics are also likely to be in focus as the White House circulates its budget to Congress.