Market Recap
Week of Aug. 8 through Aug. 12, 2022
The S&P 500 index rose 3.3% this week, the fourth consecutive weekly increase, as quarterly earnings reports continued to come in better than feared and July price data indicated inflation might be easing. The market benchmark ended Friday's session at 4,280.15, up from last week's closing level of 4,145.19. The S&P 500 hasn't had a weekly decline since the week ended July 15. It is up 3.6% for the month of August so far. However, the index is still solidly in the red for 2022 with a year-to-date decline of 10%. Much of the winning streak over the last four weeks has amounted to a relief rally as quarterly earnings reports have shown many companies still did better than expected in Q2 despite rising inflation and supply-chain issues. The S&P 500 had tumbled 8.4% in June amid fears over how those challenges would impact companies' bottom lines. Inflation data released this week provided an additional source of relief for the market. The Bureau of Labor Statistics said the US seasonally adjusted consumer price index unexpectedly held steady in July versus June while the year-over-year rate slowed to 8.5% from 9.1% in June. US producer prices for July unexpectedly declined 0.5% last month versus the prior month while producer prices were up 9.8% in July year over year, down from June's 11.3% year-over-year growth. All of the S&P 500's 11 sectors were in positive territory for the week. The energy sector had the largest percentage increase, up 7.1%, followed by a 5.5% climb in financials and a 5.1% rise in materials. The energy sector's advance came as futures in crude oil and natural gas also rose week over week. The gainers included Devon Energy (DVN), whose shares jumped 16% on the week as the company unveiled an agreement to acquire Validus Energy for $1.8 billion. Devon said it expects the deal to immediately boost all of its per-share metrics including earnings in the first year. In the financial sector, shares of Principal Financial Group (PFG) rose 17% as the company reported Q2 adjusted earnings per share and revenue above analysts' expectations. Analysts at Morgan Stanley and RBC Capital Markets raised their price targets on the stock following the report. The gainers in the materials sector included Albemarle (ALB) after the chemicals manufacturing company reported Q2 adjusted EPS above analysts' expectations last week and raised its full-year guidance. Analysts at firms including UBS, Credit Suisse, Oppenheimer and Deutsche Bank have increased their price targets on the stock since the Q2 report. Shares of Albemarle climbed 18% on the week. Next week's earnings calendar is expected to include retailers Walmart (WMT), Home Depot (HD), Lowe's (LOW), TJX (TJX) and Target (TGT). Other companies expected to release quarterly results next week include Cisco Systems (CSCO), Applied Materials (AMAT) and Deere (DE). Economic reports slated for next week will be heavy on housing data while providing additional insight into the retail sector. The NAHB home builders' index for August is expected on Monday, followed by building permits and housing starts for July on Tuesday, and July existing home sales on Thursday. July retail sales will be released on Wednesday. Provided by MT Newswires