Stock Market News for June 14, 2010 - Market News

The volatility in markets is similar to the wild swings that characterized the indices’ moves in late 2008 and early 2009.  Yet, over the last three weeks, markets do not seem to have given up much ground – or made any headway.  After sharp moves back and forth, major indexes barely managed to move from where they were three weeks ago.

Last hour swings, whether it’s a surprise rally or a pullback, have almost become a trend.  On Friday too, stocks rallied in a dramatic fashion in the last-hour of trading after an unexpected drop in retail sales triggered deep losses earlier in the session.  The Dow average snapped a three-day losing streak. 

On Friday, the blue-chip Dow average closed with gains of 39 points, or 0.4%, at 10,211.07.  For the week, the Dow average gained 2.81%, its highest weekly gain since February.  The tech-heavy Nasdaq outperformed with an advance of 25 points or 1.1%, and climbed 1% for the week.  The widely followed S&P 500 index advanced 4.76 points, or 0.44%, to 1,091.60, managing a gain of 2.5% on the week.  Friday, the market’s measure of volatility, the CBOE Vix, however, showed some signs of easing as the index dropped below 30 to 28.79, a 5.8% decline.

For much of the session, developments on the domestic front guided investors’ sentiments.  The Commerce Department’s early morning announcement of a surprise 1.2% drop in retail sales caused a widespread selloff, but an uptick in April business inventories and June consumer sentiment sent traders back into stocks.  The euro, the currency that 16 European countries share, meanwhile continued its consolidation efforts above the $1.20 level.  

The surprise rise in retail sales had a mixed bearing on stocks.  Wal-Mart WMT dropped 0.7% while Target TGT advanced 0.2%.  Costco Wholesale COST and BJ's Wholesale Club BJ fell 0.2% and 0.8%, each.  Discount chain 99 Cents Only Stores NDN up 0.5%.

For the week, the Dow average climbed 279 points, or 2.8%, managing to come out of the correction territory.  However, the average is still off 2.1% year-to-date and 8.9% from its April 26 highs.  The NASDAQ pared its year-to-date decline to 1.1%, but is still off 10.3% from its April 23 highs and remains in the correction territory.  So is the S&P500, which despite a 2.5% weekly gain remains in the correction territory with a drop of 11.3% from its April 23 highs.

Among S&P500 industry sectors, the week saw advances in all ten S&P500 groups.  Global growth assumptions, further fueled by China’s robust numbers, sent basic material shares up 5.9% while oil and gas shares rose 4.9%.  Also showing gains were: telecommunications shares (+4.1%), utilities (+3.7%), financials (+3.0%), industrials (+2.4%), health care (+2.2%), consumer goods (+2.0%), consumer services (+1.9%), and technology (+0.7%).

This week volatility is likely to remain in place as investors consider the financial regulatory reform bill, which is headed for President Obama’s signature, and its impact on big names, including Goldman Sachs GS, and JP Morgan JPM. BP’s BP oil spill and its economic and political ramifications are also likely to be of interest.  On Thursday and Friday the week's quadruple-witching is expected to add to matters of volatility and volume.