Stocks rise, but not come off intraday highs, leaving the Dow ($INDU) below 10K on the week. This blue chip index rose 29.10 points to 9,966.74, with the S&P 500 ($SPX) gaining 0.40 percent to 1,093.56. The Nasdaq ($COMPQ) advanced 15.50 points, or 0.82 percent, to close up for the week at 1,912.09. Volume was very light on Friday, despite the fact it was options expiration day. The NYSE trading 1.25 billion shares and the Naz turned over 1.37 billion shares. Market breadth was positive by a 22-to-11 and 19-to-11 margin on the Big Board and Naz respectively.
Despite a mild move higher Friday, the Dow ended the week below 10K for the first time since late November. This is bearish sign, but the move isn’t garnering as much attention for the fact volume has been so low. The Dow and SPX both moved slightly lower this past week, making it four consecutive weeks of declines. The Naz was able to break its losing streak however, gaining 0.41 percent. With the broader market moving lower on the week, the CBOE Market Volatility Index ($VIX) moved sideways. However, the Nasdaq Volatility Index ($VXN) fell 14.26 percent to 24.90.
Friday’s session experienced gains for stocks as oil prices fell below $40 a barrel. Saudi Arabia suggested that OPEC raise production by two million barrels a day to offset the high level of demand. This news, along with slightly lower interest rates, allowed the bulls to gain a degree of strength. The chip sector benefited today from a strong SEMI Book-to-Bill report Thursday afternoon as well.
The Philly Semiconductor Index ($SOX) rose nearly one percent Friday, following news that North American chip equipment sales rose 16 percent sequentially in April and were up 111 percent year over year. However, the book-to-bill ratio did rise off its record low of 1.09 to a reading of 1.14. Shares of Intel (INTC) were up half a percent and are now testing the upper channel of an ascending triangle formation.
Fed fund futures still are pricing in a 94 percent chance of a rate hike in June, but Fed Governor Bernanke helped ease fears about interest rates. Mr. Bernanke told an economist luncheon Thursday that higher rate expectations from the private-sector has already created a significant portion of the financial adjustment needed in a tightening cycle. Though this doesn’t mean rates aren’t going to move higher, it does ease tensions that the Fed will act swiftly to push rates back up to their average.
Overall, traders were unwilling to place bets heading into the weekend, especially with the OPEC meeting on tap. We’ll just have to wait until Monday to see how oil prices are impacted and how analysts react to the news.
Jody Osborne Senior Staff Writer & Options Strategist Optionetics.com ~ Your Options Education Site
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