S&P 500 Capped Best Week Since July On Light Volume

S&P 500 Capped Best Week Since July On Light Volume

$SPY, $DIA, $QQQ, $VXX, $USO, $GS, $AAPL

US stocks rose for a 2nd day running Friday on light volume, with the Standard & Poor’s 500 Index capping its best week since July before a Fed interest-rate decision due on Wednesday, 17 September.

The S&P 500 rose 0.4% to 1,960.73 at 4 p in New York. The gauge rose 2.1% on the week. The DJIA rose 102.69 pts, or 0.6%, to 16,433.09 and marked its best weekly gainer since March. The NAS 100 Index advanced 0.5%.

Volume: about 6-B/shares traded hands on US exchanges Friday, 15% below the 3-month average.

Technology and healthcare companies drove the advance for a second day. Energy companies slumped as Crude Oil fell.

A rebound in Apple (NASDAQ:AAPL) helped the S&P 500 extend its weekly advance to its best since 17 July.

Market swings and shifts in investor sentiment have become a regular happening with the benchmark index closing with moves exceeding 1.3% in 11 of the last 16 days. That includes the biggest rally since Y 2011 as well as the deepest dive in 4 years. The S&P 500 has lost 7.9% since peaking in July, which was the last time the gauge closed within points of its May record.

The Chicago Board Options Exchange Volatility Index (VIX) fell 4.8% Friday to 23.20. The measure of market fear is down 18% this month after a record 135% rise in August.

The market is pricing in only a 24% chance the Fed will raise the fed funds rates. That is  down from 48%  last month. The odds of a Fed move at the December meet are  59%.

Fed policy makers have already seen the major economic data available to them before their rate decision next week. Participants are also assessing the extent of the impact recent market volatility has had on officials’ thinking.

The global stock market turmoil took a toll on consumer sentiment

Sentiment declined in September to the lowest mark in year as Americans anticipated a weaker economy in face of a global slowdown and turbulent financial markets.

Some 17% of respondents mentioned unfavorable news about equity markets in September, the highest share since the height of the last financial crisis in October 2008. A separate report Friday showed wholesale prices were little changed in August, restrained by lower motor fuel costs.

A Goldman Sachs Group Inc. (NYSE:GS) report Thursday suggested recent turbulence in financial markets may affect the Fed’s rate decision on 17 September. The recent stock market sell-off, an increase in corporate borrowing costs and the rise of the USD have contributed to a tightening of financial conditions roughly equivalent to three 25 bpts hikes in the central bank’s benchmark federal funds rate, according to the Goldman report.

Eight of the S&P 500 10 main groups rose Friday, with consumer discretionary, utilities and healthcare shares rising the most. Apple added to yesterday’s 2.2% climb to drive its weekly rise to 4.5%.

A rally in homebuilders helped pace gains among consumer discretionary shares.

Energy and raw-materials companies fell, with energy losing 0.7% to erase a gain for the week. WTI Crude Oil (NYSEArca:USO) futures fell 2.8% as Goldman Sachs cut its price forecasts for 2015 and said the 20 bbl Crude Oil is possible.

If you are fully invested, perhaps this is a good time to take money off of the table.

Have a terrific weekend.

HeffX-LTN

Paul Ebeling

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