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Market Recap
WEEK OF JUL. 24 THROUGH JUL. 28, 2023
The S&P 500 index rose 1.0% this week, led by the communication services sector, amid stronger-than-expected Q2 earnings while US economic growth for Q2 also surpassed expectations. The market benchmark ended the week at 4,582.23, up from last Friday's close of 4,536.34. With just one session left in the month, the S&P 500 is now up 3% for July. It is up 19% for the year to date.
The week's advance was limited by concerns about future rate policy as the Federal Reserve's Federal Open Market Committee raised its key rate. The boost, while just a quarter of a percentage point, follows a pause in rate increases last month and led to more questions on what may be ahead for the Fed's policy.
The S&P 500 still ended the week in positive territory as many companies posted stronger-than-expected Q2 results and US gross domestic product grew 2.4% in Q2, surpassing economists' consensus estimate for a 1.5% expansion according to Econoday. This represents stronger growth than Q1's 2% expansion.
Communication services had the sharpest weekly increase, up 6.8%, followed by a 1.8% increase in materials and a 1.7% rise in energy. Other sectors that gained included technology, consumer discretionary, consumer staples and industrials.
Four sectors posted weekly declines: Utilities shed 2.1%, real estate lost 1.8%, health care dropped 0.8% and financials edged down 0.2%.
The gainers in communication services were led by Facebook parent Meta Platforms (META) and Google parent Alphabet (GOOGL), which jumped 11% each.
Meta Platforms posted Q2 results that exceeded Wall Street's estimates and released stronger-than-expected revenue guidance for the current quarter. Alphabet delivered Q2 per-share earnings and revenue that topped year-earlier results and market estimates as revenue growth accelerated in its search and YouTube businesses.
In materials, International Paper (IP) gained 12% as the packaging and pulp company reported Q2 adjusted operating earnings per share above analysts' mean estimate despite net sales coming in slightly below consensus.
In the energy sector, shares of Hess Corp. (HES) added 4.8%. The oil and gas company posted Q2 adjusted net income per share above analysts' mean estimate and raised its guidance for 2023 net production, citing strong operations performance and the expected startup of its Payara development in early Q4.
Decliners in the utilities sector included shares of Xcel Energy (XEL), which shed 3.6% on the week. The electricity company reported Q2 earnings per share as well as revenue below year-earlier results and analyst estimates.
In the real estate sector, shares of UDR (UDR) declined 7% as the multifamily real estate investment trust reported Q2 adjusted funds from operations and revenue below analyst estimates.
This week's earnings calendar features Merck (MRK), Pfizer (PFE), Advanced Micro Devices (AMD), Caterpillar (CAT), Starbucks (SBUX), Apple (AAPL), Amazon.com(AMZN), ConocoPhillips (COP), and Berkshire Hathaway (BRK.A, BRK.B).
Among economic reports, the Labor Department's July employment data are likely to receive the most attention. Other reports expected this week include the Institute for Supply Management's latest readings on the manufacturing and services sectors.
