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Market Recap
WEEK OF JUN. 12 THROUGH JUN. 16, 2023
The S&P 500 index rose 2.6% this week and reached fresh 52-week highs amid stronger-than-expected retail sales and as Federal Reserve officials opted not to raise interest rates for the first time in 11 policy meetings.
The market benchmark closed Friday's session at 4,409.59, up from last week's close of 4,298.86. The index reached a fresh 52-week intraday high at 4,448.47 on Friday but closed slightly below Thursday's closing level, snapping a six-session winning streak. The index is now up 15% this year.
The week's advance came as economic data continued to come in above expectations, including a report showing US retail sales unexpectedly rose on a monthly basis in May, led by motor vehicles and building materials.
Investors also got a boost when the Federal Open Market Committee, which had raised rates for 10 consecutive meetings through May, chose to keep rates steady at its June meeting that ended on Wednesday. This is expected to represent a pause in rate increases rather than the end of them, but investors were relieved to see rates hold steady for the first time in several meetings.
By sector, technology had the largest percentage increase of the week, climbing 4.4%, followed by a 3.3% rise in materials and a 3.2% increase in consumer discretionary, among other gainers. Only one sector was in the red: Energy shed 0.7%.
The technology sector's gainers included shares of Oracle (ORCL), which jumped 14% on the week as the computer technology company reported fiscal Q4 results above analysts' expectations amid a revenue boost from cloud services and license support.
In the materials sector, shares of Ball Corp. (BALL) climbed 11% as the aluminum packaging and aerospace technologies company's CEO spoke to investors at a conference.
Carnival (CCL) shares led the advance in the consumer discretionary sector as BofA Securities upgraded its investment rating on the cruise operator's stock to buy from neutral following "positive" meetings with the management of three cruise companies including Carnival. Following the meetings, BofA said it is more confident industry demand remains steady, the pricing environment is rational and booking curves are "in line with company expectations." Carnival's shares soared 21%.
On the downside, the energy sector's drop came as Goldman Sachs lowered its investment ratings and price targets on some shares in the sector. Shares of EOG Resources (EOG) fell 2.4% as Goldman Sachs downgraded its investment rating on the stock to neutral from buy while cutting its price target to $130 from $137. Shares of Diamondback Energy (FANG) shed 2.7% as Goldman Sachs cut its price target on the stock to $154 from $163.
Next week will be a shortened week as the US stock market will be closed on Monday for the Juneteenth holiday. Tuesday, May housing starts will be reported. May existing home sales will be released on Thursday along with leading economic indicators. June readings on the services and manufacturing sectors from Standard & Poor's will come on Friday.
