Gilmer Free Press

U.S. Market Weekly Summary - – Week Ending 10.05.2018

The Free Press WV

The Standard & Poor’s 500 index fell 1.0% this week, starting October and Q4 on a weak note as a tumble in consumer-discretionary stocks along with declines in a number of other sectors outweighed gains in energy, utilities, financials and industrials.

The market benchmark ended the week at 2,885.57, down from last week’s closing level of 2,913.98.

The decline came as September employment data released Friday showed the unemployment rate fell in September to 3.7%, its lowest level since 1969 and lower than economists’ prediction for a 3.8% rate, but US nonfarm payrolls increased by a seasonally adjusted 134,000, weaker than the 180,000 gain economists had expected and representing the smallest increase in a year.

The employment data were seen by the market as keeping the Federal Open Market Committee on track to gradually lift rates. Investors are concerned about the impact on the US economy and stocks.

The consumer-discretionary sector had the largest percentage drop of the week, down 4.4%, followed by a 2.7% decline in real estate and drops of 2.2% each in technology and telecommunications. On the upside, utilities and energy rose 1.9% each, followed by a 1.5% rise in financials and a 0.8% gain in industrials.

The consumer-discretionary sector’s decliners included Lennar (LEN), which fell 4.1% on the week despite the homebuilder’s Wednesday report of better-than-expected fiscal Q3 results. RBC Capital Markets cut its price target on Lennar’s stock after the report as the firm lowered its estimates for the homebuilder’s fiscal 2018 orders and 2019 earnings per share, citing “non-core items and ancillary businesses.“

In the technology sector, this week’s decliners included IPG Photonics (IPGP), whose stock fell 15% as the provider of high-power fiber lasers and amplifiers issued a warning it expects revenue for Q3 to be between $355 million and $356 million, below its previous guidance range of $360 million to $390 million.

On the upside, the energy sector was boosted by gains in crude-oil futures as the oil market anticipated the spare capacity needed to replace Iranian barrels next month. Shares of Chevron (CVX) rose 2.5% on the week.

The utilities sector’s gains came as the sector typically benefits when investors are seeking the safety of services that are seen as necessary regardless of the economy. The gainers included FirstEnergy (FE), whose shares rose 2.2% this week as Citigroup raised its price target on the stock to $37 per share from $34.

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