The Week In Review


The stock market added to its holiday gain with a Friday advance that was paced by the Nasdaq Composite (+0.7%). For its part, the S&P 500 (+0.3%) climbed to a new record high at 2,088.77 with seven sectors ending in the green.

Although the major averages posted decent-sized gains, the advance occurred on below-average volume. In fact, today's NYSE floor volume of 436 million shares represented the second-lowest total of the year. This was well below the 50-day average of 808 million and only ahead of Wednesday's 340 million that was registered in a shortened session. Anemic volume wasn't unique to the U.S. session as equity indices across Europe were closed altogether while markets across Asia enjoyed a low-volume rally.

Seven sectors finished the day in the green with countercyclical utilities (+1.2%) and telecom services (+1.1%) in the lead. However, the two represent just a small fraction of the market and their performance was not as impactful as the strength in the third largest group by weighthealth care (+0.7%).

The health care sector was powered by biotechnology as the industry group continued its rebound from a slip earlier in the week. The iShares Nasdaq Biotechnology ETF (IBB 306.61, +6.81) gained 2.3% and narrowed its weekly decline to 3.3% after being down as much as 7.9% at its lowest point on Tuesday.

Biotechnology was largely responsible for the outperformance of the Nasdaq, but the index also drew strength from large cap technology names like Apple (AAPL 113.99, +1.98), Google (GOOGL 541.52, +4.59), and Qualcomm (QCOM 75.62, +0.96). Chipmakers, meanwhile, struggled to keep pace with the PHLX Semiconductor Index adding 0.1%. As for the technology sector (+0.4%), the top-weighted cyclical group settled ahead of the broader market.

Elsewhere among cyclical sectors, consumer discretionary (+0.5%) was the only other area of outperformance thanks to broad strength. Groupon (GRPN 8.14, +0.25) caught some attention, spiking 3.2% after Korea Times reported that Goldman Sachs may purchase Groupon-owned Ticket Monster.

Other cyclical sectors finished behind the broader market with energy (unch) ending at the bottom of the leaderboard. The growth-sensitive sector began the day among the leaders, but was pressured from its early high by intraday weakness in crude oil. Crude futures were up as much as 1.0% overnight following reports of an attack on an oil storage tank at Libya's largest port. The strength was short-lived as oil reversed, and tumbled throughout the day to end lower by 2.0% at $54.65/bbl. The resulting weakness in the sector pressured major components like Chevron (CVX 113.25, -0.22) and ExxonMobil (XOM 93.21, -0.57), which in turn, weighed on the Dow Jones Industrial Average (+0.1%).

In other commodities, copper futures fell 1.5% to $2.812/lb into the neighborhood of early December lows while gold climbed 1.8% to $1.194.30/ozt.

Treasuries posted modest gains with the 10-yr yield slipping one basis point to 2.25%.

Monday's session will be free of economic data.

Nasdaq Composite +15.1% YTD
S&P 500 +13.0% YTD
Dow Jones Industrial Average +8.9% YTD
Russell 2000 +4.4% YTD
Week in Review: New Records for Dow and S&P 500

The stock market kicked off the abbreviated week with a Monday advance that sent the Dow Jones Industrial Average and S&P 500 to new all-time highs. The Dow finished ahead of the S&P 500 with 27 of its 30 components ending higher. Meanwhile, the S&P 500 was held back by the underperformance of health care names, and especially, biotechnology. Health care was weak due in large part to a large loss in Gilead Sciences (GILD), which followed reports that pharmacy benefits manager Express Scripts (ESRX) is going to displace Gilead's hepatitis C drug, Sovaldi, in favor of a less expensive offering from AbbVie (ABBV), Viekira Pak, which recently won FDA approval and will become the exclusive option in the formulary for patients with genotype 1 hepatitis C.

The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.2%) rallied to new record highs on Tuesday with the Dow crossing above the 18,000 mark for the first time. However, widespread losses in the biotechnology group prevented the Nasdaq Composite (-0.3%) from taking part in the rally. Equity indices began the day in the green after a better than expected revision to Q3 GDP (5.0%; consensus 4.3%) provided a pre-market boost. The GDP report was a bright spot among a torrent of mostly disappointing data, which was taken in stride by the market. Nine of ten sectors registered gains with the energy space (+1.3%) ending in the lead. The growth-sensitive sector opened ahead of other groups and held the lead into the close. Crude oil, meanwhile, settled higher by 3.1% at $57.09/bbl and continued its advance in electronic trading with the move taking place even as the Dollar Index (90.13, +0.36) climbed 0.4%.

The stock market had the rug pulled out from under it as the Christmas Eve session headed for the close. The S&P 500 ended flat after surrendering a five-point gain while the Nasdaq Composite (+0.2%) outperformed. The key indices started with slim gains and inched higher into the afternoon amid light volume, before a wave of selling interest knocked the indices from their highs. Only 340 million shares changed hands at the NYSE floor, which was a far cry from the average full session total of about 826 million. Only three sectors finished in the green while energy (-0.8%) played the role of Grinch. The growth-sensitive group could not make it into positive territory as crude oil weighed. The energy component fell 3.6% to $55.08/bbl with a larger than expected inventory build contributing to the weakness.

Bond and equity markets were closed on Thursday for Christmas.