Market Wrap for Friday, August 9: Stocks Close Lower To End Week
The U.S. stock market came under more selling pressure on Friday, with all three major market averages finishing in the red. A number of losses over the last 5 days sent the S&P 500 out with a better than 1 percent decline on the week.
Although the sell-off has thus far been gradual, trepidation appears to be rising on Wall Street over the Federal Reserve's timeline for tapering its quantitative easing program. Commentary from the central bank this week has re-introduced the possibility that the Fed will scale back its bond purchases as early as the September FOMC meeting.
Investors, who have become accustomed to constant liquidity injections by the central bank to support the economic recovery, are unsure how the economy may fare in the absence of quantitative easing. Nevertheless, the losses were contained during the week's final trading session, with the largest decline being a 73 point pullback in the Dow.
The Dow Jones Industrial Average shed 73 points, or 0.47 percent, to close at 15,425.
The S&P 500 lost 6 points, or 0.36 percent, to 1,691.
The Nasdaq fell 9 points, or 0.25 percent, to close the week at 3,660.
Wholesale inventories fell 0.2 percent for the month of June after declining 0.6 percent in May. This marked the third consecutive monthly decline in inventories and the fourth drop on the year. The consensus expected wholesale inventories to rise 0.4 percent in June.
Crude oil snapped a 5-day losing streak on Friday. In late afternoon trade, NYMEX crude futures were up 2.50 percent to $105.99 while Brent crude contracts had added 1.45 percent to $108.23. Natural gas contracts were last trading down 2.34 percent on the session to $3.22.
Precious metals rose again on Friday. Heading into the closing bell for equities, COMEX gold futures were up 0.18 percent to $1,312.20 on CME GlOBEX. Silver futures had climbed 1.15 percent and were last trading at $20.43 in the electronic session. Copper followed a strong rally on Thursday with a gain of 1.28 percent to $3.3125.
The entire grains complex fell to end the trading week, although losses were mostly contained. Corn futures were last down 1.41 percent while wheat lost 1.21 percent. Movers in soft commodities, where volatility was limited, included sugar and orange juice. Sugar futures rose a little less than 1 percent while orange juice concentrate futures were down almost 3 percent.
Long-term Treasury prices were up slightly on Friday afternoon. At last check, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) had risen 0.12 percent to $107.21.
Yields were as follows near the end of the trading day: The 2-Year Note yield was at 0.30 percent while the yield on the 5-Year Note was 1.35 percent. The 10-Year Note and 30-Year Bond were yielding 2.57 percent and 3.63 percent, respectively.
The U.S. Dollar was last trading slightly higher on the session. Heading into the closing bell for equities, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign equities, had added 0.14 percent to $21.94.
The closely watched EUR/USD pair had lost 0.35 percent to $1.3340. Other movers included the USD/CAD, which fell 0.38 percent, and the AUD/USD, which was last up 1.02 percent.
Volatility and Volume
The CBOE Volatility Index (VIX) recorded another moderate gain on Friday as stocks fell. Late in the day, the VIX was trading up a little better than 5 percent to 13.38.
Volume remained light to end the trading week. August is normally a sleepy month in the market as many investors are on Summer vacation. Around 78 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 133 million.
Record results for the company's fiscal fourth-quarter sent shares of Ubiquiti Networks (NASDAQ: UBNT) up around 26 percent on the day.
NPS Pharmaceuticals (NASDAQ: NPSP) had leaped almost 27 percent near the close after the company's fiscal Q2 results and outlook impressed Wall Street.
Intrexon (NYSE: XON) had surged better than 19 percent late on Friday during its second-day as a publicly traded company. In its market debut on Thursday, the IPO jumped 38 percent.
Air Methods (NASDAQ: AIRM) climbed around 16 percent on the session despite missing Wall Street estimates for the company's fiscal second-quarter. Analysts said that Air Methods' business is set for a strong rebound in the second-half of the year.
Tableau Software (NYSE: DATA) reported better-than-expected Q2 results, sending the shares up more than 12 percent late on Friday.
Disappointing results from Chinese ADR Youku Tudou (NYSE: YOKU) sent that stock skidding around 8 percent to end the trading week.
Rare-earth miner Molycorp (NYSE: MCP) delivered second-quarter results which failed to impress investors. Near the close, shares of the Greenwood Village, Colorado-based company were down more than 10 percent.
Wright Medical Group (NASDAQ: WMGI) lost around 8 percent on Friday after the company's Augment Bone Graft failed to receive regulatory approval from the FDA. The agency said that the company will have to conduct another clinical trial in a "well-defined high-risk target population" before seeking approval again.
Mobile Mini (NASDAQ: MINI), a provider of portable storage solutions, released second-quarter earnings results that failed to impress investors. Near the close, the stock had lost roughly 7 percent.
Private-education provider DeVry (NYSE: DV) fell in the wake of the company's fiscal Q4 financial results. At last check, the stock had shed more than 7 percent on the session.
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