April 13th, 2017: A Week in Review (DJIA 21-Month Chart)

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Photo: Snider Advisors

WSJ — Major indexes slid for a second consecutive week, as investors dumped shares of financial and industrial companies while picking up haven assets.

Stock declines on Thursday were broad, with all 11 sectors of the S&P 500 ending lower.

Concerns over flaring tensions in North Korea, Russia and Syria, as well as light trading ahead of the long weekend, contributed to the tepid moves in stocks, analysts and investors said. Major indexes’ declines steepened Thursday afternoon after the U.S. military dropped its largest nonnuclear bomb on an ISIS tunnel complex in Afghanistan.
“We’re in a wait-and-see mode at the moment,” said Kate Warne, a principal and investment strategist at Edward Jones.

President Trump, shown Wednesday in Washington, said in an interview with The Wall Street Journal that the dollar was ‘getting too strong.’
President Trump, shown Wednesday in Washington, said in an interview with The Wall Street Journal that the dollar was ‘getting too strong.’
While investors appear to have dialed back some of their initial expectations for policy changes from the Trump administration, “the fundamentals have and will continue to drive the market,” Ms. Warne said. A raft of upbeat corporate earnings could lift stocks in coming weeks, she added.

The Dow Jones Industrial Average fell 138.61 points, or 0.7%, on Thursday to 20453.25, the S&P 500 dropped 15.98 points, or 0.7%, to 2328.95, and the Nasdaq Composite lost 31.01 points, or 0.5%, to 5805.15. U.S. markets will be closed Friday in observance of Good Friday.

For the week, the Dow industrials lost 1%, the S&P 500 fell 1.1% and the Nasdaq shed 1.2%.

Investors backed off postelection bets that initially led them to pile into financial and industrial stocks while selling government bonds.

The KBW Nasdaq Bank Index, a benchmark of 24 of the biggest U.S. lenders, posted a 3.2% weekly loss. The index fell 1.4% on Thursday after a trio of major banks reported earnings results, with J.P. Morgan Chase falling $1, or 1.2%, to $84.40.

Shares of industrial companies in the S&P 500 lost 1.6% for the week. The sector fell 0.7% Thursday, with Alaska Air Group losing 2.33, or 2.6%, to 86.33.

“It’s unlikely legislation will provide a big catalyst to stocks over the next several months,” said Jim McDonald, chief investment strategist at Northern Trust. “The issues [the administration] is facing are really thorny, and that means they’ll take longer to progress.”
Havens gained. Gold for April delivery rose 2.5% for the week to $1,285.90 an ounce, for the best weekly percentage gain since February.

U.S. government bonds strengthened for a fourth consecutive session Thursday. The yield on the benchmark 10-year U.S. Treasury note fell to 2.237%, its lowest settlement since Nov. 16, from 2.294% on Wednesday. Yields fall as bond prices rise.

The WSJ Dollar Index, which measures the U.S. dollar against a basket of 16 others, rose 0.2% Thursday as investors moved to square up positions heading into the Easter holiday weekend. The dollar had slumped late Wednesday after President Donald Trump said it was “getting too strong.”

Elsewhere, the Stoxx Europe 600 fell 0.3% on Thursday.

Japan’s Nikkei Stock Average slipped 0.7% to its lowest level since December. Hong Kong’s Hang Seng Index was down 0.2%.

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