S&P 500 Edges Up 0.1% on Week

February 4, 2017

The Standard & Poor’s 500 index edged up 0.1% this week as a Friday gain on an anticipated rollback of financial regulations as well as signs the labor market has more room to expand helped erase declines from earlier in the week.

The major market measure ended Friday’s session at 2,297.42, up slightly from last week’s closing level of 2,294.69. The measure had been down 0.6% for the week as of Thursday’s close, but that was wiped out by a 0.7% Friday increase amid executive actions by President Donald Trump to spur easing of financial regulations as well as economic data showing room for labor-market progress.

The jobs data for January showed employers added 227,000 jobs last month, the biggest gain since September, yet the unemployment rate rose to 4.8% from 4.7% a month earlier as more people returned to the job market looking for work. Taken together, the readings were seen as an encouraging sign that the labor market has more room to expand.

The health-care sector led the week’s climb, followed by consumer staples, utilities and real estate. Financials also finished the week slightly higher. On the downside, the telecommunications, materials and industrials sectors had the largest declines. Energy and consumer-discretionary shares also fell.

The health-care sector’s increase amounted to 2.4% as a number of companies reported fourth-quarter results above analysts’ expectations. Among them, IDEXX Laboratories (IDXX) jumped 17% this week and Boston Scientific (BSX) climbed 5.7%.

In the telecommunications sector, shares of AT&T (T) fell 1.8% this week as the company filed a prospectus to sell $10 billion in notes, with proceeds to be used for general corporate purposes, including the repayment of upcoming maturing debt.

Meanwhile, shares of AT&T rival Verizon Communications (VZ) dropped 2.1% this week as the company unveiled pricing terms of its two previously announced related transactions to repurchase 18 series of its outstanding notes. Verizon also announced the completion of its $1.8 billion purchase of XO Communications’ fiber-optic network business.

Among industrials, Ryder System (R) shares fell 5.2% from a week ago after the provider of transportation and supply-chain management services reported a bigger-than-expected drop in fourth-quarter adjusted earnings per share. Ryder also forecast 2017 adjusted earnings per share below analysts’ views.

Snap-On (SNA) shares declined 6.0% this week despite the tool manufacturer’s report of higher-than-expected fourth-quarter adjusted earnings and revenue. Investors fretted over a slowdown in the pace of growth in its Snap-on Tools Group segment, which is its biggest contributor to revenue. Year-on-year revenue growth from the segment amounted to 1.5% in the fourth quarter of 2016, down from the 4.4% pace of growth posted in the third quarter of 2016 as well as the 6.1% growth reported for the fourth quarter of 2015.

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By DR Staff Writer

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