By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Oil prices recover some from a drubbing
NEW YORK (MarketWatch) -- U.S. stocks ended February with a
whimper and a roar. The main indexes finished the week roughly
where they started it, but still booked hefty monthly gains.
Analysts cited stabilization in oil prices, accommodative
central bank policies around the world and hopes for resolution in
Greece debt drama as well as a tentative peace agreement between
Russia and Ukraine as the main drivers for monthly advances on Wall
Street.
Read: Stocks just registered their largest monthly gains in four
years
(http://www.marketwatch.com/story/stocks-just-registered-their-largest-monthly-gains-in-nearly-four-years-2015-02-27)
The S&P 500 (SPX) ended 6.25 points, or 0.3%, lower at
2,104.73, and booked a 0.3% loss over the week. The benchmark index
advanced 5.5% over the past month, however, for the best monthly
gain since October 2011.
The Dow Jones Industrial Average (DJI) dropped 82.04 points, or
0.5%, to 18,132.38, finishing the week flat. The blue-chip index
booked a 5.7% gain over the month, the largest percentage gain
since January 2013.
The Nasdaq Composite (RIXF) lost 24.36 points, or 0.5%, to
4,963.53 and was slightly higher over the week. The monthly gain of
7.1% marked its best monthly move since January 2012.
Ahead of the opening bell, the first revision to figures for
gross domestic product showed the U.S. economy grew at a slower
pace than originally estimated, but still the revision proved
better than expected. The economy grew at a revised 2.2% in the
fourth-quarter of 2014, the GDP report indicates
(http://www.marketwatch.com/story/us-fourth-quarter-gdp-trimmed-to-22-from-26-2015-02-27).
Jonathan Golub, Chief U.S. market strategist at RBC Capital
Markets, said that investors are usually more interested in
forward-looking data, such as the Institute for Supply Management,
or ISM report on Monday, rather than backward-looking reports like
the revision to GDP.
"Today's revision was already anticipated and when you annualize
quarterly data, those changes were meaningless," Golub said.
Friday's mixed economic data provided little new insight and to
investors. The February reading of Chicago PMI tumbled to a 5 1/2
year low of 45.8, MNI Indicators, an economic data website, said
Friday. The number indicated a contraction, impacted by West Coast
port strikes and a harsh winter. But pending-home sales rose in
January to the highest level since Aug. 2013, the National
Association of Realtors reported Friday. University of
Michigan/Thomson Reuters consumer-sentiment index dipped to 95.4
from January's 98.1.
Michael Arone, chief investment strategist at State Street
Global Advisors, said in aggregate, the economy has been growing
slowly but steadily.
"There were good aspects on the GDP report and they pointed to
increased business spending and wage acceleration. While we are not
roaring at a 4% growth like in the 90s, we need to remember that we
also have much lower interest rates and low inflation," Arone
said.
"The biggest driver in stock markets is central bank liquidity.
Close to 20 central banks cut interest rates and are very
accommodative. As companies are at the highest level of
profitability, in such an environment, price-to-earnings ratios of
17-18 are not overly concerning," he said.
Oil prices recover: Both WTI (CLJ5) and Brent crude gained on
Friday, which lent some support to energy names. Oil futures ended
seven-month losing streak, posting solid monthly gains. Brent crude
recorded its biggest monthly gain in nearly six years, rising 18%
for the month.
Read: There is more to oil's plunge than record-high supplies
(http://www.marketwatch.com/story/theres-more-to-oils-thursday-plunge-than-record-high-supplies-2015-02-26)
The dollar held on to gains after the U.S. Dollar Index (DXY)
hit levels not seen since 2003 on Thursday. European stocks were
slightly higher, while property shares dragged Hong Kong stocks
lower.
Stocks to watch: Shares of Apple Inc.(AAPL) dropped 1.5% after
Ericsson AB said it would sue the tech giant for infringing on 41
patents
(http://www.marketwatch.com/story/ericsson-sues-apple-for-infringing-41-patents-2015-02-27)
it says are crucial to the functionality of Apple's devices.
Apple said Thursday that it will hold an event on March 9, and
the company hinted that it will be related to the launch of its
Apple Watch, as the invitation said "Spring Forward," The Wall
Street Journal reported
(http://blogs.wsj.com/digits/2015/02/26/apple-plans-special-event-on-march-9-likely-for-smartwatch/).
(http://blogs.wsj.com/digits/2015/02/26/apple-plans-special-event-on-march-9-likely-for-smartwatch/)
(http://blogs.wsj.com/digits/2015/02/26/apple-plans-special-event-on-march-9-likely-for-smartwatch/)J.C.
Penney Co. Inc.(JCP) slid 6.8% after the retailer posted a surprise
fourth-quarter loss
(http://www.marketwatch.com/story/jc-penney-shares-tumble-after-company-posts-quarterly-loss-2015-02-26).
Gap Inc.(GPS) shares rose 3.1% after the retailer announced
buybacks and a dividend increase late Thursday
(http://www.marketwatch.com/story/gap-shares-rise-after-fourth-quarter-profit-beats-estimates-2015-02-26).
(http://www.marketwatch.com/story/gap-shares-rise-after-fourth-quarter-profit-beats-estimates-2015-02-26)
(http://www.marketwatch.com/story/gap-shares-rise-after-fourth-quarter-profit-beats-estimates-2015-02-26)For
more on Friday's notable movers, read Movers & Shakers column
(http://www.marketwatch.com/story/berkshire-hathaway-nrg-kbr-earnings-in-focus-2015-02-26).
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