Stocks End Mixed, Disney Jumps After Strong Earnings
4:55 pm Friday, August 13th, 2021
The S&P 500 ended with modest gain Friday, boosted by Walt Disney and tech-related shares, while signs of cooling inflation and a strong recovery in corporate earnings put the indexes for a second straight weekly gain.
The consumer staples sector displayed relative strength from the start, rallying to a fresh high after the preliminary reading of the University of Michigan Consumer Sentiment survey for August fell from 81.2 to 70.2, reaching its lowest level since late 2011 due to deteriorating sentiment about all aspects of the economy. The weak report did not derail the stock market, but instead contributed to a cautious tone to today’s session. The consumer staples sector is now up 2.0% for the week, thanks to gains in all components.
The health care sector is continuing its rebound from a shaky first half of the week. The group was up 0.3% for the week with Pfizer (PFE) contributing to today’s advance after the FDA expanded the emergency use authorization to allow for a third dose of the coronavirus vaccine in immunocompromised subjects. The news has lifted Pfizer toward its record from Tuesday while Moderna (MRNA) slipped to the midpoint of yesterday’s range.
Like health care, chipmakers underperformed earlier this week, but the industry group is bouncing today with the PHLX Semiconductor Index (+0.5%) narrowing this week’s loss to 2.4%. Roughly 2/3 of the group’s components trade higher, helping the technology sector (+0.2%) maintain a modest gain even though top tech components like Apple (AAPL) and Microsoft (MSFT) traded mixed.
On the downside, financials (-0.7%) lag with big banks like JPMorgan Chase (JPM) and Bank of America (BAC) backtracking from their best levels since early June. The sector remains on course to gain 1.9% for the week.
Treasuries have rebounded steadily through the first half of today’s session, sending the 10-yr yield back below its 200-day moving average (1.310%). The benchmark yield is down seven basis points at 1.30% for the day but still up one basis point since last Friday.
There is still some uncertainty about the future of big spending plans in Washington after nine House Democrats said they won’t vote for the $3.5 trillion budget resolution until the $1.2 trillion bipartisan infrastructure bill is signed into law.
