Weekly Market Recap: The Fed Reserve’s Outlook, Epic Week for Apple

Monday

Markets closed mixed on Wall Street today: Dow +0.29%, S&P +0.02%, Nasdaq -0.16%, Oil -0.92%, Gold -0.64%.

On the commodities front, Oil (NYSE:USO) fell to $106.41 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,700.60 an ounce while Silver (NYSE:SLV) fell 1.73% to settle at $33.62.

Today’s markets were mixed because:

1) Fed. Investors adopted a wait-and-see stance today that made for rather thin trading as they looked forward to a couple key announcements from the Federal Reserve. On Tuesday, the Fed is expected to announce that it will leave key interest rates unchanged at very low levels, but investors will be looking for signs as to how the central bank plans to proceed in the coming months. Investors are also awaiting the results of the Fed’s latest bank stress tests, expectations for which caused several stocks to slide, including Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Credit Suisse (NYSE:CS), and Morgan Stanley (NYSE:MS).

2) Companies. Bank of America (NYSE:BAC) was also down because the bank said Friday it would significantly slash mortgage balances for as many as 200,000 borrowers as part of the $26 billion settlement reached between the federal government and five major mortgage servicers. Tudou (NASDAQ:TUDO) shares shot up 157 percent after it announced its merger with Youku (NYSE:YOKU). PepsiCo (NYSE:PEP) shares climbed on the news that Brian Cornell rejoined the company as CEO of PepsiCo Americas Food, and that John Compton would become president.

3) Gas. The national average price for a gallon of gas rose above $3.80 on Monday, according to a survey conducted for the motorist group AAA. Prices gained 3.4 cents a gallon over the weekend.

Tuesday

Markets closed up on Wall Street today: Dow +1.68%, S&P +1.81%, Nasdaq +1.88%, Oil +0.35%, Gold -1.61%.

On the commodities front, Oil (NYSE:USO) rose to $106.71 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,672.50 an ounce while Silver (NYSE:SLV) fell 1.43% to settle at $33.27.

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Today’s markets were up because:

1) Banks. Investors focused on shares of big banks today, one of two sectors (the other is tech) that tend to reflect an increased appetite for risk. Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JPMorgan Chase (NYSE:JPM) led the market’s rally today, climbing more than 6 percent each. JPMorgan closed the day up more than 7 percent after getting an extra push from the bank’s announcement that it would raise its dividend 20 percent and had authorized a $15 billion share repurchase plan.

2) Tech. First Solar (NASDAQ:FSLR), Micron Technology (NASDAQ:MU), and JDS Uniphase (NASDAQ:JDSU) were all strong today, leading an impressive tech rally that witnessed across-the-board gains for companies ranging from Intel (NASDAQ:INTC) to Apple (NASDAQ:AAPL) to ARM Holdings (NASDAQ:ARMH). The Nasdaq rose 1.88 percent, outperforming the other two major U.S. markets, though the S&P 500 and Dow were helped by financials.

3) Fed. Markets were up all day but jumped higher in the last hour of trading after the Federal Reserve issued a fair outlook for the U.S. economy. As expected, policymakers chose not to implement any new stimulus programs, so few could be disappointed. And while the central bank remained cautious in giving its assessment of the current state of the economy, policymakers did give a more upbeat outlook for the job market and the global economy.

Wednesday

Markets closed mixed on Wall Street today: Dow +0.12%, S&P -0.12%, Nasdaq +0.03%, Oil -0.98%, Gold -2.99%.

On the commodities front, Oil (NYSE:USO) fell to $105.66 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,643.60 an ounce while Silver (NYSE:SLV) fell 4.29% to settle at $32.14.

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Today’s markets were mixed because:

1) Tech. Technology stocks helped support markets today, as Apple (NASDAQ:AAPL) continued to perform, with shares hitting a new record of $600 each, while shares of semiconductor companies jumped after LSI Corp. (NYSE:LSI) reported strong quarterly results and issued an upbeat outlook for the current quarter. Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) are among the day’s other big winners.

2) Banks. Declining financials countered strength in the technology sector today. Banks led yesterday’s rally on news that most had passed the Federal Reserve’s stress tests, but the mood was more somber on Wednesday as investors punished those banks who fell short. Citigroup (NYSE:C) shares declined 3.40 percent, leading the day’s losers, which included PNC Financial (NYSE:PNC), Goldman Sachs (NYSE:GS), and MetLife (NYSE:MET).

3) Deficit. The U.S. current-account deficit widened in the fourth quarter to $124.1 billion, the biggest such gap in three years, the Commerce Department reported this morning. The deficit was expected to stand at $113.8 billion. The increase in the current-account deficit, which is considered to be the broadest measure of international trade, is a sign of businesses’ growing reliance on foreign funding and imports to replace dated equipment.

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Thursday

Markets closed up on Wall Street today: Dow +0.12%, S&P +0.60%, Nasdaq +0.51%, Oil -0.02%, Gold +0.89%.

On the commodities front, Oil (NYSE:USO) fell to $105.41 a barrel. Precious metals were up, with Gold (NYSE:GLD) rising to $1,657.60 an ounce while Silver (NYSE:SLV) rose 0.77% to settle at $32.43.

Today’s markets were up because:

1) Jobs. Initial jobless claims fell to a four-year low last week, according to a Labor Department, helping push the S&P 500 to a four-year high. The index topped 1,400 for the first time since 2008 after initial jobless claims fell back down to their lowest level since the recession, after climbing slightly in the previous week, signaling steady and sustained growth in the job market.

2) Banks. Financials have been in focus this week following the results of the Federal Reserve’s latest stress tests, which the majority of the nation’s largest banks passed, meaning they would be able to weather another deep depression. Bank of America and JPMorgan (NYSE:JPM) have been a couple of the best-performing stocks on the Dow today, but even Citigroup (NYSE:C) and Metlife (NYSE:MET) were trading higher today, despite a poor performance on the stress test.

3) Stocks. The Apple (NASDAQ:AAPL) feeding frenzy continued as shares topped $600 when markets opened this morning. Cisco (NASDAQ:CSCO) shares slipped after the company announced its $5 billion bid to buy NDS Group, which is privately held by News Corp. (NASDAQ:NWS) and Permira. Scholastic (NASDAQ:SCHL) shares surged after the company reported revenue of $468 million fueled by strong sales of the Hunger Games book series ahead of the film adaptation’s release next week.

Friday

Markets closed mixed on Wall Street today: Dow -0.15%, S&P +0.11%, Nasdaq -0.04%, Oil +2.00%, Gold +0.02%.

On the commodities front, Oil (NYSE:USO) rose to $107.21 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) rising slightly to $1,659.80 an ounce while Silver (NYSE:SLV) fell 0.60% to settle at $32.53.

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Today’s markets were mixed because:

1) Data. Inflation rose 0.4 percent in February after rising 0.2 percent the previous month, justifying fears that had consumer sentiment down this month according to the Thomson Reuters/University of Michigan sentiment index. Higher gas prices were responsible for most of the rise, and could hurt consumer spending. Industrial production was unchanged in February, according to a Federal Reserve report today, disappointing after expectations for a 0.5 percent increase.

2) Tech. Apple (NASDAQ:AAPL) shares were flat today after climbing in the weeks preceding the iPad’s debut. Likewise, AT&T (NYSE:T) and Verizon (NYSE:VZ) didn’t seem to benefit from the iPad’s launch today, even though the two companies have exclusive rights to provide coverage for the 4G models. Sprint (NYSE:S) was one of the sector’s few standouts today, climbing more than 3 percent on news it ended its $9 billion agreement with LightSquared to build a high-speed wireless service.

3) Oil. Higher oil and gas prices are a serious threat to the economic recovery, as Americans forced to spend more at the pump have less to spend on other consumer goods. The U.S. and U.K. are considering strategic reserves releases, but neither President Barack Obama’s administration nor Prime Minister David Cameron will admit to having serious talks on the matter. Meanwhile, tensions with Iran have kept oil prices high, with Brent crude around $126 a barrel today and WTI, the American standard, up 2 percent today to $107.21.

To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com