THE GIST (“THE WHAT”)
The S&P 500 index traded within the 4150 and 4100 price band the entire week as uncertainty around the debt ceiling and ongoing banking turmoil capped optimism around the first quarterly earnings. Opening higher, the index gave up gains following a disappointing consumer sentiment data only to test the psychologically important 4100 once again. Bouncing off of the day’s low at 4099.12, the index closed at 4124.07, down slightly by 6.56 points (-0.16%), logging a second weekly loss in a row.
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THE DETAILS (The “How & Why”):
Markets remain directionless as the uncertainty around debt ceiling remains a major overhang. Regional banks continued to trade lower, led by a 2.9% drop in PacWest after the troubled lender reported a 9.6% decline in deposits over the last week. Lincoln National Corp was the worst decliner within the sector, down 4.16%. Investors sold off banks and other cyclical stocks and bought into the so-called safe-haven mega-cap technology stocks this week as yields moved lower amid global recession concerns.
Gen Digital Inc. (-5.48%), Carnival Corp (-4%) and Catalent Inc. (-3.89%) were amongst the worst decliners of the session, falling 5.48%, 4% and on missing earnings estimates.
On the bright side, News Corp was strong gainer, up 8% on reporting stronger-than-expected quarterly earnings. Charles Schwab jumped more than 2% after reporting a strong quarter on the back of rising number of new clients in its brokerage business.
First Solar Inc. was the best performer of the session, surging 26.48% and lifting the sector after the U.S. Treasury released set of new rules suggesting that solar manufacturers could receive extra tax credits by producing their products in the U.S.