After a two-day dive, the major American stock indices managed to reverse course on Friday, despite the stock market’s worst week of 2013.
The major American stock indices managed to pull out of the red on Friday to finish the worst week of 2013 with a positive day. Because the markets were closed on Monday, investors experienced one good day on Tuesday before stocks tanked. Friday’s turnaround was facilitated by a better-than-expected earnings report from Hewlett-Packard (NYSEARCA:HPQ). Apple’s decision to issue preferred shares gave the Nasdaq leader a boost of almost one percent (NASDAQ:AAPL). European bullishness, sparked by a report from Germany’s Ifo Institute that its Business Climate Index made its greatest increase since July of 2010, helped motivate American investors who were attempting to “buy the dip”. Fixed Up Friday – You Call That a Sell-Off?
As of 2:24 EST, the Dow Jones Industrial Average advanced 89 points (0.65 percent) to 13,970. The S&P 500 Index rose 0.58 percent to 1,511 (NYSEARCA:SPY). As the chart (above) indicates, the S&P 500 remains above its 50-day moving average of 1,475. Its next resistance level is in the 1,550 – 1,570 range. Its Relative Strength Index rose to 55.54 (Chart courtesy of Stockcharts.com). The Nasdaq Composite climbed 0.65 percent to 3,151 (NASDAQ:QQQ). The Russell 2000 Index jumped 0.80 percent to 912 (NYSEARCA:IWM).
The “Dollar Bull” Index ETF (NYSEARCA:UUP) advanced by 2 cents (0.08 percent) to 22.24 as of 2:17 EST.
As of 2:04 EST, the S&P 500 Volatility Index – or VIX – declined 5.39 percent to 14.40 and the VIX Short-Term Futures ETN fell 2.32 percent to 22.73 (NYSEARCA:VXX). As Volatility Hits New Lows, It Could Be Time to Sell
The Euro STOXX 50 Index finished Friday’s trading session with a 1.95 percent surge to 2,630 – remaining just below its 50-day moving average of 2,644. After breaking above its resistance level of 2,700 on January 21, the STOXX 50 continues to experience overhead resistance at that level, which has been a barrier since the beginning of the year. Its Relative Strength Index is down to 38.68 (NYSEARCA:FEZ). The FTSE 100 rose 0.70 percent to 6,335 (NYSEARCA:EWU). The German DAX Index jumped 1.03 percent to 7,661 (NYSEARCA:EWG). France’s CAC 40 Index skyrocketed 2.25 percent to 3,706 (NYSEARCA:EWQ). Spain’s IBEX 35 Index soared 2.05 percent to 8,179 (NYSEARCA:EWP). Italy’s FTSE MIB Index surged 1.40 percent to 16,233 (NYSEARCA:EWI).
As of 2:16 EST, the euro dipped 0.03 percent against the dollar, trading at $1.3184 (NYSEARCA:FXE).
On London’s ICE Futures Europe Exchange, April futures for Brent crude oil advanced by 47 cents (0.41 percent) to $114.00/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) +0.70% as bargain hunters were out in force after European bullishness became contagious.
SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) +2.15% after Germany’s Ifo Business Climate Index for February made its greatest increase since July of 2010.
Technology Select Sector SPDR ETF (NYSEARCA:XLK) +0.95% following the big gains by Apple and Hewlett-Packard.
iShares Barclays 20+ Year Treasury Bond Fund (NYSEARCA:TLT) +0.16% bonds remained attractive despite advancing stock prices as Wednesday’s demonstrations and strikes in Greece to protest austerity measures, raised anxiety about the European sovereign debt crisis, making the safe haven of U.S. Treasury securities more attractive. Learn More About iShares ETFs
SPDR S&P 500 INDEX ETF (NYSEARCA:SPY) +0.62% as upbeat earnings reports motivated bargain hunters to “buy the dip”.
Bottom line: Investors were anxious to end the stock market’s worst week of 2013 on a positive note by responding to the European rally and a better-than-expected earnings report from Hewlett-Packard, with an attempt to benefit from lower stock prices – as the maxim states: “buy the dip”.