Stocks were little changed to close the week, though the S&P 500 inched to a new record high, while the price of gold rallied on Friday. For the week, each of the equity markets finished with modest gains, lead by the Nasdaq’s 1% advance.
First, the scoreboard:
- Dow: 17,634.7, -18, (-0.1%)
- S&P 500: 2,039.82, +0.5, (+0.02%)
- Nasdaq: 4,688.5, +8.4, (+0.2%)
And now, the top stories on Friday:
1. In what was otherwise a quiet week for economic data, we got two pieces of positive economic news regarding the health of the US consumer. Retail sales in October rose 0.3% from the prior month, beating expectations for a 0.2% increase, as sales at gasoline stations fell 1.5% against the prior month amid a major bear market for oil. The University of Michigan’s preliminary consumer confidence reading for November came in at 89.4, its highest reading since July 2007.
2. Following the retail sales report, Ian Shepherdson at Pantheon Macro said that while sales beat expectations in October, any real boost to consumer spending from the declining price of gas will likely not show up until the November report, though that impact should be larger. Paul Dales at Capital Economics, said the consumer confidence reading indicates there’s a good chance “retailers’ holiday wishes will be granted.”
3. Oil prices keep falling, and Business Insider’s Tomas Hirst has the big outline of the three main reasons being cited for the drop in the commodity: slowing growth in Europe and Asia, more supply drive by the US shale boom, and increased global production. And the International Energy Agency said in a recent report, “a return to previous price highs may not be a close prospect, as it is increasingly clear that we have begun a new chapter in the history of the oil markets.”
4. Virgin America made its debut on the Nasdaq on Friday, and shares of the airline owned by Richard Branson rose more than 30% in their debut, giving the company a valuation of about $US1.25 billion. The offering was priced at $US23, and shares closed Friday’s session at $USx.
5. Despite the lack of action in the equity markets, the “flight to safety” trade — which also saw bonds gain — had a little bit momentum on Friday, lead by the price of gold spiking more than 2% to around $US1,190, the highest price for the precious metal since it breached $US1,200 back at the end of October.
6. Hertz shares fell more than 5% on Friday after the company disclosed that its net income will be reduced by $US87 million over its fiscal years 2011, 2012, and 2013 after it restates its financial results following an internal review. The company said the biggest errors identified in its probe related to depreciation for some assets and accounts in Brazil, among other items.
7. It was a quiet week in the markets, but don’t let that lull you to sleep. In a midday email, the NYSE’s Rich Barry said that markets are in “quiet consolidation mode,” but this is ok! “As we noted yesterday, the major indices are technically overbought,” Barry wrote. “This means the recent action we’ve witnessed since the October 15th six-month low has represented nothing less than a buying stampede into stocks. History tells us that ‘overbought’ scenarios are usually corrected either by an abrupt pullback in prices or by a period of boring, sideways consolidation. Today, we are seeing the latter, but our feeling is that next week we might be confronted with the former. Either way, it is ok.”