By Anora Mahmudova and Sara Sjolin, MarketWatch
S&P 500 ekes out gains, closes at record level
U.S. stocks ended the day's choppy session marginally higher
Friday with the main indexes eking out weekly gains.
Investors grappled with weaker-than-expected economic reports
which left the timing of the Federal Reserve's next rate hike still
uncertain for investors.
A pair of manufacturing data released ahead of the market open,
came in below expectations, underlying the recent trend of weakness
poking through in the U.S. economy. The preliminary May reading on
consumer sentiment fell to the lowest level in seven month, also
well below forecasts.
John Manley, chief equity strategist at Wells Fargo Advantage
Funds, said the recent trend of weaker data is worrisome.
"I am surprised about extended weakness, but I am not ready to
get out of stocks yet, as there is nothing definitive yet to say
the economy is going into a recession," Manley said.
The S&P 500 (SPX) closed 1.63 points, or 0.1%, higher at
2,122.73, a fresh record. The benchmark index gained 0.3% over the
week.
The Dow Jones Industrial Average (DJI) added 20.32 points, or
0.1%, to 18,272.56, rising 0.5% over the week.
The Nasdaq Composite (RIXF) ended the session 2.5 points lower
at 5,048.29, but managed a 0.9% gain over the week.
"Bond markets now appear to have stabilized, and if anything,
they're paring some of the losses, which is helping overall
sentiment," Erlam said. "The perception that the Fed will be forced
to hold off on its first rate hike a little longer, following those
weak retail-sales figures on Wednesday, is also supporting equity
markets."
Craig Erlam, senior market analyst at OANDA, said the moves on
Friday reflected calm "that has returned to the bond markets" after
a volatile week in fixed-income trading.
U.S. stocks have been weaving in and out of losses this week, as
investors digested the battered bond markets and a string of mixed
data that raised questions about the strength of the U.S. economy.
This has spurred speculation the Fed will wait to raise interest
rates until later this year, rather than in June, which some market
participants had been forecasting.
Former Fed Vice Chairman Donald Kohn said the debate over
rate-hike timing is focused on a move between September and
December
(http://www.marketwatch.com/story/feds-rate-hike-choice-is-september-or-december-kohn-says-2015-05-14).
Data:The Empire State manufacturing index
(http://www.marketwatch.com/story/empire-state-factory-gauge-rebounds-slightly-to-31-in-may-2015-05-15)moved
back into positive territory in May, but only barely and missed
forecasts.
Industrial production
(http://www.marketwatch.com/story/industrial-production-slumps-03-in-april-for-5th-straight-decline-2015-05-15)
fell a seasonally adjusted 0.3% in April, the Federal Reserve said
Friday. Revised data from the U.S. central bank showed that this
was now the fifth straight decline in output.
Meanwhile, consumer sentiment
(http://www.marketwatch.com/story/may-umich-sentiment-falls-to-886-a-seven-month-low-reports-say-2015-05-15)fell
to a preliminary May reading of 88.6, a seven-month low, compared
with a final April level of 95.9, according to reports on the
University of Michigan gauge released Friday.
Movers and shakers: Shares of Netflix Inc. (NFLX) rose 4.5%
after reports the entertainment-streaming service is in talks with
a Chinese media company to enter China's online-video market
(http://www.bloomberg.com/news/articles/2015-05-15/netflix-said-in-talks-to-enter-china-with-jack-ma-backed-wasu).
Avon Products Inc.(AVP) gave up 1.6% after what appeared to be a
bogus takeover offer on Thursday
(http://www.marketwatch.com/story/sec-looking-into-dubious-bid-for-avon-2015-05-15).
El Pollo Loco Holdings Inc.(LOCO) slumped 15% after the
fast-food chain late Thursday reported sales below forecasts.
On a more upbeat note, Yum! Brands Inc.(YUM) jumped 4.4% after
the fast-food company was upgraded to overweight from neutral at
J.P. Morgan.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/nordstrom-symantec-el-pollo-loco-shares-in-focus-friday-2015-05-14).
Other markets: European stock markets erased gains and ended
lower after euro rose following weak U.S. data
(http://www.marketwatch.com/story/european-stocks-build-on-draghi-inspired-gains-2015-05-15).
In Asia, Hong Kong's Hang Seng Index closed 2% higher
(http://www.marketwatch.com/storyno-meta-for-guid), boosted by talk
that a stock-connect program between Hong Kong and Shenzhen will be
announced as soon as this weekend.
Oil (http://www.marketwatch.com/storyno-meta-for-guid)(CLM5)
settled 0.3% lower at $59.69, but booked the ninth weekly gain in a
row. Gold futures
(http://www.marketwatch.com/story/gold-drops-from-3-month-high-still-set-for-solid-weekly-gain-2015-05-15)(GCM5)
settled 10 cents higher at $1,225.30, posting a 3.1% gain over the
week. The dollar weakened against the euro.
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