Stock market today: Stocks end a dreadful week on a decent note

A rally on Friday left the major indices again significantly lower over the past five trading days.

There wasn’t much good news to attribute to Friday’s move. US industrial production improved less than expected in May, up 0.2% against estimates of 0.4%; manufacturing actually fell 0.1%. Wells Fargo economists Tim Quinlan and Shannon Seery defend the release as “actually a decent report”, noting however that an upward revision to the April figure (+1.4% vs. +1.1% ) puts the May production level slightly above expectations.

Edward Moya, senior market strategist at currency data provider OANDA, said yesterday’s selloff may have been overdone. This quarter’s “quadruple witch” event – the simultaneous expiration of futures and options on stocks and stock indices – “may have accelerated the selling pressure until today,” he says.

US equities stayed true to their 2022 narrative, with rate-sensitive stocks recovering the fastest as the 10-year Treasury yield cooled down to 3.19%. Communication Services (+1.4%) and Technology (+0.9%) equities were among the leaders; Charter Communications (CHTR, +6.4%) rebounded somewhat from yesterday’s notch, with T-Mobile United States (TMUS, +2.7%) and (CRM, +2.1%) among Friday’s big winners.

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The energy sector (-5.5%) was hit again, however, as U.S. crude oil prices fell (6.8% to $109.56 a barrel) as investors weighed both a potential slowdown in demand amid global recession fears and the potential for increased supply as US production ramps up. .

The end result was a nice rally of 1.4% (to 10,798) for the Nasdaq Compound, which nonetheless ended the week down 4.8%. The S&P500 (+0.2% to 3,674) improved slightly to end the week down 5.8%, while the Dow Jones Industrial Average lost its lead and fell 0.1% to 29,888, ending the five-day period at 4.8%.

And a reminder: the stock market will be closed on Monday for June 16th.

Other news on the stock market today:

  • Small cap Russell 2000 was bid 1.0% higher at 1,665.
  • Gold Futures Contracts fell 0.5% to settle at $1,840.60 an ounce.
  • Bitcoin ended its week down 1.6% to $20,512.15. (Bitcoin trades 24 hours a day; prices shown here are as of 4 p.m.)
  • seagen (SGEN) jumped 12.7% amid buzz from this blue-chip pharma company Merck (MRK, -0.7%) plans to buy the biotech. Citing people who knew them afterwards, a report in The Wall Street Journal suggested talks have been underway for some time, but regulatory issues exist. The acquisition would help Dow Jones stock bolster its cancer treatment portfolio, which is currently led by blockbuster drug Keytruda.
  • The AZEK company (AZEK) gained 6.2% after BofA Global Research analyst Rafe Jadrosich upgraded the building products maker to buy on hold. The bullish rating came on the heels of AZEK’s analyst day, where the company forecast average annual revenue growth of 10% through 2027. Additionally, “Azek is now trading roughly in line with the group of construction products despite a significant opportunity to convert materials into composite materials. decking,” says Jadrosich. “During the last bear cycle, decking was only down 20%. We expect composite decking companies to outperform the broader market given the acceleration in the conversion trend over the past two years.”

Embrace volatility (and profit from it)

There is no chasm: it was a trying week for most anyone with a stake in the market. And while strategists remain largely optimistic about the long-term outlook for equities, investors might need to brace themselves for the same tumultuous in the coming months.

“Volatility and a bearish sentiment seem to have taken permanent hold of the US market for some time,” said Kunal Sawhney, CEO of Australian research firm Kalkine Group. “Inflation, impending recession, global economic slowdown and other macroeconomic fallout from the Russia-Ukraine crisis weighed heavily on investors. As a result, the US stock market invariably turned volatile with a different outcome every day. If the indices end up one day, they drift lower the next.

Investors can, however, rely on a few sectors of the market to calm their stomachs. Utilities and real estate stocks that pay dividends, for example, have provided some protection lately.

But you don’t have to limit yourself to one or two sectors.

UBS recently highlighted 43 stocks from across the market that look like attractive ways to profit during the market carnage. UBS focused on stocks where its analysts have “a really differentiated view from the consensus, and where we have interesting or proprietary data sources.” If you’re an agile investor looking to not only protect yourself, but also generate some alpha amid the chaos, read on.

About Troy McMiller

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