Weekly Wrap from Briefing.com

Briefing.com

Dow -123.23 at 16960.57, Nasdaq -22.54 at 4449.56, S&P -9.64 at 1978.34

The stock market capped the trading week with losses across the major averages. The S&P 500 fell 0.5% to surrender its weekly gain, while the Dow Jones Industrial Average (-0.7%) and Russell 2000 (-0.9%) underperformed. The two indices posted respective losses of 0.8% and 0.6% for the week.

Equity indices were pressured from the get-go after several heavyweights disappointed the market with their earnings and/or guidance, which led to some broader profit-taking. After the opening slide was complete, the major averages began inching higher, but were knocked to fresh lows in short order when it was reported that European Council President Herman Van Rompuy suggested the next round of sanctions against Russia should target oil (but not gas) companies.

The retreat in equities signaled the presence of underlying concerns that a new round of economic sanctions could have a boomerang effect on the global economy. For its part, oil futures responded by spiking off their lows to end little changed at $102.10/bbl.

Eight of ten sectors finished in the red with the consumer discretionary space (-1.2%) at the bottom of the leaderboard. The sector, and Nasdaq Composite (-0.5%), were pressured by shares of Amazon.com (AMZN 324.01, -34.60), which fell 9.7% in reaction to a bottom-line miss and cautious guidance. Other retailers did not escape unscathed with the SPDR S&P Retail ETF (XRT 84.33, -1.00) sliding 1.2%.

Elsewhere among cyclical groups, the top-weighted S&P 500 sector-technology (-0.2%)-ended ahead of the broader market despite a 3.6% drop in Visa (V 214.77, -7.97). The payment processor reported better than expected earnings, but its guidance was a point of concern for investors.

Deeper in the tech sector, high-beta chipmakers displayed broad losses after Freescale Semiconductor (FSL 19.98, -2.11), Maxim Integrated (MXIM 29.38, -3.56), and KLA-Tencor (KLAC 71.60, -1.42) reported disappointing results. The trio lost between 1.9% and 10.8%, while the PHLX Semiconductor Index fell 2.0%.

Even though the tech sector finished ahead of the broader market, other heavily-weighted sectors like energy (-0.8%) and financials (-0.6%) prevented the S&P 500 from staging an afternoon recovery.

The financial sector settled just behind the S&P 500, which was fitting as both the economically-sensitive sector and the benchmark index ended the week unchanged. Insurer Chubb (CB 89.62, -3.14) was a notable underperformer, falling 3.4% in reaction to a lowered full-year outlook on the back of a disappointing second quarter and larger than expected insurance payouts.

Although the market ended near its lows, that was not the case for El Pollo Loco (LOCO 24.03, +9.03), which made its debut today. The newcomer soared 60.2% after its IPO priced at $15.00 per share and opened at $19.00.

Treasuries rallied into the early afternoon and the 10-yr note settled on its high with the benchmark yield down four basis points at 2.47%.

Participation was well below average with under 558 million shares changing hands at the NYSE, suggesting there was no 'rush for the exits' taking place.

On the economic front, the durable orders report for June surpassed estimates (+0.7% versus Briefing.com consensus 0.3%), but shipments of goods declined 1.0%, which will be a negative for Q2 GDP.

Monday's data will be limited to the Pending Home Sales report for June (Briefing.com consensus -0.8%), which will be released at 10:00 ET.

Week in Review: Earnings in Focus

Things could have been better on Monday for the stock market and they could have been worse. They were worse in the early going as the major indices backpedaled quickly at the start of trading. The ostensible catalysts for the opening retreat were geopolitical concerns over Israel's ground assault in Gaza and the troublesome diplomatic dealings in the wake of Malaysian Air flight MH17 being shot down over eastern Ukraine last week. At their lows of the morning, the Dow, Nasdaq, and S&P 500 were down 126, 28, and 12 points, respectively. They would eventually battle back, though, to pare their losses, drawing encouragement from technical support holding at 1966 for the S&P 500 and a small sense of relief that remarks from President Obama did not include the imposition of any new sanctions against Russia.

The market finished the Tuesday session on an upbeat note with small caps pacing the rally. The Russell 2000 advanced 0.8%, while the S&P 500 added 0.5% with eight sectors ending in the green. Although geopolitical concerns factored into the modest retreat on Monday, the worries were cast aside on Tuesday after separatist forces in eastern Ukraine handed over black boxes from MH17 to Malaysian authorities and Secretary of State John Kerry began working on brokering a cease fire in Gaza. Furthermore, the sentiment was boosted by a slate of mostly better than expected earnings. Notably, Chipotle Mexican Grill (CMG) soared 11.8% after beating estimates and surpassing comparable restaurant sales growth expectations. However, McDonald's (MCD) painted a less upbeat picture with its stock falling 1.3% in reaction to below-consensus earnings and revenue.

Equities ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire trading day below its flat line. The midweek affair started on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, participants turned their attention to quarterly earnings as another dose of better than expected results pushed the S&P 500 into record territory.

On Thursday, stocks maintained a narrow trading range before ending the session essentially where they began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed. Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI (51.9; expected 51.7) and Services PMI (54.4; expected 52.7) also surpassed estimates. In addition to upbeat data from overseas, participants received a batch of better than expected earnings, but the market had a difficult time building on its early gain. The S&P 500 surrendered its opening advance during the initial minutes, but was able to follow that with a rally to a fresh record high (1991.39). The index could not hold that level into the afternoon and slipped back to its flat line by the close.

IndexStarted WeekEnded WeekChange% ChangeYTD %
DJIA17100.1816960.57-139.61-0.82.3
Nasdaq4432.154449.5617.410.46.5
S&P 5001978.221978.340.120.07.0
Russell 20001151.611144.72-6.89-0.6-1.6

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