Categories: Tech News

S&P 500 posts ~4% weekly gain even as big tech disappoints; Fed meeting in focus

The S&P 500 (SP500) on Friday added 3.95% to end the week at 3,901.06 points, its highest closing level since mid-September. The benchmark is now on a two-week winning streak.

The concentration has arrived a heavy earnings week dominated by quarterly numbers for megacap tech stocks. Sentiment has also been buoyed by hopes that the Federal Reserve may slow its aggressive rate hike campaign, with the focus now on the central bank’s policy meeting starting next Wednesday. It is widely expected to raise interest rates by 75 basis points, and comments from policymakers will be closely watched for clues about the Fed’s path.

FAANG companies Meta Platforms, Alphabet, Amazon and Apple reported a mixed set of results for the week. Parent Google posted a decline in ad revenue, while the e-commerce giant issued a gloomy holiday sales forecast, causing its stock to lose its trillion-dollar market cap status. Investors were particularly upset with Facebook owner Meta. Shares of the social media giant surged more than 25% on Wednesday after a dismal quarterly report and outlook.

Apple was the top performer, with its shares gaining after better-than-expected results and lifting Wall Street’s three main indexes on Friday.

Microsoft and Intel were among the other tech giants to report results. Several other high-profile companies announced figures, including industrial Caterpillar, fast-food giant McDonald’s, drugmaker Merck, aerospace parts maker Honeywell and aircraft maker Boeing.

Economic news also contributed to the S&P 500’s (SP500) weekly gain. A contraction in US business activity for a fourth straight month and a bigger-than-expected drop in home prices suggested progress was being made in the Federal Reserve’s efforts to cool the economy. Investor sentiment was also helped by GDP data showing the US economy rebounded in the third quarter.

In addition, market participants looked at a larger-than-expected decline in the Conference Board’s consumer confidence index, a narrower-than-expected decline in new home sales, a decline of personal consumption expenditures, lower-than-expected jobless claims, durable goods orders, a rise in the core PCE price index, a drop in pending home sales and the employment cost index of the third quarter.

The SPDR S&P 500 Trust ETF (NYSEARCA: SPY) Friday gained 3.91% for the week next to the benchmark. The ETF is -18.12% YTD.

Except for communications services, all 11 sectors of the S&P 500 (SP500) closed the week higher, led by Industrials and Utilities. See below for a breakdown of the sectors’ weekly performance, as well as the performance of their accompanying SPDR Select Sector ETFs from October 21 through the close of October 28:

#1: Industrial +6.73%and the Select Industrial Sector SPDR ETF (XLI) +6.69%.

#2: Utilities +6.48%and the Select Sector Utilities SPDR ETF (XLU) +6.48%.

#3: Finances +6.19%and the Financial Select Sector SPDR ETF (XLF) +6.21%.

#4: Real estate +6.17%and the Select Real Estate Sector SPDR ETF (XLRE) +6.20%.

#5: Consumer staples +6.09%and the Consumer Staples Select Sector SPDR ETF (XLP) +6.18%.

#6: Health care +5.00%and the Select Healthcare Sector SPDR ETF (XLV) +4.99%.

#7: Information technology +4.28%and the Technology Select Sector SPDR ETF (XLK) +4.21%.

#8: Materials +3.34%and the Materials Selection Sector ETF SPDR (XLB) +3.36%.

#9: Energy +2.75%and the Energy Select Sector SPDR ETF (XLE) +2.67%.

#10: Discretionary consumer +0.71%and the Consumer Discretionary Select Sector SPDR ETF (XLY) +1.78%.

#11: Communication services -2.85%and the Select Sector Communication Services SPDR Fund (XLC) -2.23%.

Below is a chart of the 11 sectors’ YTD performance and how it fared against the S&P 500. For investors looking ahead to what’s going on, check out the Seeking Alpha Catalyst Watch for next week’s breakdown of actionable events that stand out .


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