The stock market meandered through a lazy week with the S&P 500 adding 0.4% after spending the week in a 24-point range. The benchmark index was outpaced by the Nasdaq Composite (+0.8%) while the Dow Jones Industrial Average (UNCH) settled little changed.
The week started on a quiet note as participants awaited a slew of earnings and Thursday's policy decision from the European Central Bank. However, range bound action continued through Friday.
The European Central Bank made no changes to its interest rate corridor and President Mario Draghi made sure to avoid any specific references to either tapering or extending the purchase program before March 2017. The euro climbed immediately after the policy announcement, but retreated during Mr. Draghi's press conference. The single currency continued declining on Friday, ending the week near 1.0875 against the dollar, near levels from early March.
To be fair, the decline in the euro was facilitated by all-around dollar strength as the greenback benefited from economic data and comments from FOMC Vice Chair William Dudley, who said a rate hike before the end of 2016 makes sense to him. The implied probability of rate hike in December stands at 69.9%, according to the fed funds futures market. For its part, the Dollar Index registered its third consecutive weekly gain, climbing 0.7% to levels not seen since late January.
The strength in the dollar prevented crude oil from making big strides. The energy component settled at $50.85/bbl, just above its closing level from last week.
Market participants received another batch of quarterly results with the reporting season set to hit full stride next week. Investors did receive above-consensus results from a large share of Dow components like American Express (AXP), General Electric (GE), Goldman Sachs (GS), IBM (IBM), Johnson & Johnson (JNJ), Microsoft (MSFT), McDonald's (MCD), UnitedHealth (UNH), and Verizon (VZ). Interestingly, the batch of beats did not spark a buying frenzy. On the whole, tech earnings were received with the warmest reception, evidenced by the outperformance in the Nasdaq Composite.
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