Market Recap
Week of Apr. 25 through Apr. 29, 2022 The S&P 500 limped into the close and ended a fourth consecutive week in the red after Amazon's (AMZN) disappointing outlook weighed on sentiment. The benchmark index was down 3.3% in the latest week at 4,131.93 from last week's close of 4,271.78 with all eleven sectors in the red. For the month of April, the S&P 500 suffered its heaviest losses since March 2020, down more than 9% over the last four weeks. Amazon fell to a 22-month low after saying Thursday it swung to a Q1 loss and issued a Q2 sales forecast that missed expectations, killing a rally into the end of the month that was led by bargain hunters. The sell-off caused tech stocks to lose ground for a second week, down another 1.2% from last Friday's close. Stocks were defensive at the start of the week ahead of the flood of corporate results with earnings expected to disappoint following supply chain warnings from General Electric (GE) and downbeat results from Raytheon (RTX). The material sector escaped most of Friday's selling frenzy with a loss of just 0.8% largely on a 12% rally in Sherwin-Williams (SHW) and an 8% jump in shares of Avery Dennison (AVY) both of which reported better-than-expected quarterly results last week. The energy sector was down 1.3% as the solid gains in shares of Valero (VLO) resulting from upbeat earnings insulated the sector from heavy losses from Halliburton (HAL) and Schulumber (SLB). The remaining sectors struggled into the close with consumer discretionary at the bottom of the pack with a 7.9% loss. Amazon and Tesla (TSLA) were the worst-performing stocks in the sector with Amazon losing 14% in value for the week, and shares of Tesla undermined by CEO Elon Musk's $8.5 billion sale of his personal stock to help finance his $44 billion Twitter (TWTR) acquisition. Real estate stocks lost 5.6 on continued headwinds from rising mortgage rates. Equity Residential (EQR) and AvalonBay (AVB) were down 11% and 9%, respectively. The financial sector was down 4.6% from the prior week's close as heavy losses in AON (AON) and Cincinnati Financial (CINF) overshadowed more modest gains in insurance stocks like Chubb (CB) and Comerica (CMA). Consumer staples were down 2.1% followed by a 2.5% loss in health care stocks. Led by a 15% drop in shares of General Electric, the industrials sector closed 2.8% in the red, while Comcast's (CMCSA) 12% drop last week resulted in a 4.1% decline in the communications sector despite a rally in shares of Meta (FB). Economic data also contributed to the sour mood on Wall Street last week. The economy contracted 1.4% in the first quarter, the US Bureau of Economic Analysis said in a report, but the bad news was tempered by strong consumer spending. While personal income and spending improved in March, inflationary pressures on consumers remained high, fueling expectations that the Federal Reserve will need to raise interest rates by at least 50 basis points next week. The Federal Open Market Committee meeting on Wednesday, at which time the Fed is expected to deliver its second rate hike since 2018, and the April payroll data highlight economic data next week. The economy is expected to have created 385,000 jobs which will drive down the unemployment rate to 3.5%. Next week's heavy economic calendar also includes the Institute for Supply Management and final S&P Global manufacturing and service sector PMIs for April, the durable goods report, JOLTS figures, the trade balance report, non-farm productivity and unit labor costs and the ADP employment report on private jobs. Provided by MT Newswires
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