S&P 500 (SP500) on Friday advanced 2.47% closed for the week at 4,070.56 points, while its companion SPDR S&P 500 Trust ETF (NYSEARCA: A SPY) added 2.48%.
The progress adds to the overall positive start of the benchmark index New Year. The S&P 500 has now posted gains in three of the first four weeks of 2023.
Investors returned to rising stocks during the week, with consumer and technology companies jumping the most. Market participants strengthened their positions and bought stocks ahead of the first meeting of the Federal Reserve’s monetary policy committee next week. The central bank is widely expected to taper off a 25 basis point rate hike, and the general consensus is that the Fed’s aggressive rate hikes are now off the table.
During the week, fourth quarter earnings season also kicked into high gear. Results from many of the big companies came in and were mostly mixed. The technology sector saw reports from stalwarts such as Microsoft ( MSFT ), IBM ( IBM ) and Intel ( INTC ), with all three disappointing investors. On the other hand, numbers and guidance from electric vehicle maker Tesla ( TSLA ) were met with enthusiasm.
Dow 30 components 3M ( MMM ), Verizon ( VZ ), Travelers ( TRV ), Johnson & Johnson ( JNJ ), Boeing ( BA ), Visa ( V ), American Express ( AXP ) and Chevron ( CVX ) were among the other companies report your results.
Earnings season will get even busier next week, with household names like Apple ( AAPL ), Amazon ( AMZN ), Meta ( META ) and Alphabet ( GOOG ) ( GOOGL ) on tap.
During the week there was also a lot of economic data. Core personal consumption expenditure inflation moderated in December, boosting sentiment.
However, manufacturing data continued to point to signs of a slowing economy, with the S&P Global Composite PMI for January showing a contraction in business activity for the seventh straight month and the Richmond Fed manufacturing survey for January coming in worse than expected.
Meanwhile, the initial estimate of US GDP growth in the fourth quarter was stronger than expected, but showed a slowdown from the third quarter. Moreover, the number of Americans filing weekly jobless claims fell to a nine-month low, continuing to point to the resilience of the labor market.
Investors also looked at a higher National Street investor confidence index for January, a reduction in business uncertainty over earnings, a larger-than-expected increase in durable goods orders in December and a rise in December new home sales and pending home sales.
Of the 11 S&P 500 (SP500) sectors, nine ended the week in the red, led by heavyweights Consumer Discretionary and Information Technology. Utilities and healthcare were the two losers. Below is a breakdown of the weekly performance of the sectors as well as their companion SPDR Select Sector ETFs from January 20th to close on January 27th:
#1: Consumer discretionary rights +6.38%and Consumer Discretionary Select Sector SPDR ETF (XLY) +6.41%.
#2: Information Technology +4.07%and Technology Select Sector SPDR ETF (XLK) +4.08%.
#3: Communication Services +3.28%and the SPDR fund for selected sectors of communication services (XLC) +4.12%.
#4: Real estate +2.82%and Real Estate Select Sector SPDR ETF (XLRE) +2.88%.
#5: Finances +2.53%and Financial Select Sector SPDR ETF (XLF) +2.55%.
#6: Industry +2.13%and Industrial Select Sector SPDR ETF (XLI) +2.17%.
#7: Energy +0.76%and Energy Select Sector SPDR ETF (XLE) +0.83%.
#8: Materials +0.71%and Materials Select Sector SPDR ETF (XLB) +0.75%.
#9: Staples for general consumption +0.43%and Consumer Staples Select Sector SPDR ETF (XLP) +0.33%.
#10: Utilities -0.49%and Utilities Select Sector SPDR ETF (XLU) -0.49%.
#11: Healthcare -0.89%and Health Care Select Sector SPDR ETF (XLV) -0.78%.
Below is a chart of the year-to-date performance of 11 sectors and how they fared relative to the S&P 500. For investors looking ahead to what’s going on, check out the Seeking Alpha Catalyst Watch for a breakdown of the action events that stand out next week.