Stocks Ended Flat; Lackluster Weekly Performance

Published on Friday, 21 September 2012 17:35 Written by Christopher Lynn

New York, September 21^st (TradersHuddle.com) – Stocks closed the session narrowly mixed, with the S&P 500 practically ending flat for the day, as participants shrugged earlier optimism over a report suggesting that Spain might request a bailout soon, paving the way for ECB assistance. The session marked the end of the week where the Fed induced rallied lost steam, spurring a cautious trade that resulted in lackluster weekly performance.

The Dow Jones Industrial Average lost 17.48 points, or 0.13%. The S&P 500 index slid less than 1 point or 0.01%, while the NASDAQ climbed 4 points, or 0.13%.

For the week, the Dow fell 0.10%, while the S&P 500 lost 0.38% and the NASDAQ slid 0.13%.

The market started in positive territory after overseas markets regained support following the prior session drops amid weak manufacturing and trade data that signaled a recession in Europe, sluggish growth in the U.S., and a Chinese economic slowdown. Optimism over improvements in the debt crisis in the euro zone climbed after the Financial Times reported that Spain was close to asking for a bailout, paving the way for the ECB bon-buying program to begin.

Volume was high at the start of the session, with quadruple witching likely contributing to the surge. However, after reaching session highs within the first minutes of trade, equities spent the rest of the day drifting towards the unchanged line. As a result the S&P 500 finished flat and the other major benchmark indices ended narrowly mixed for the session, but lower for the week, as the Fed induced rally lost steam, spurring a lackluster performance.

Despite the S&P 500 ended flat for the session, all of the key sectors closed in negative territory, with consumer staples, utilities, and materials logging the biggest declines, while healthcare, technology, and energy posted the best performances.

Apple (NASDAQ: AAPL) gained 0.2% to close the week at the $700 mark. The stock broke above $700 at the start of the week on news that it sold a record 2 million iPhones 5 in pre-order in the first 24 hours. The device hit retail stores today in nine countries around the world, with 22 more schedule for next Friday, making it the most aggressive launch for an iPhone ever. The stock logged a new all-time high of $705 earlier in the session.

Telecom stocks actually gained 0.6% as a group with AT&T (NYSE: T) gaining 0.37%, Verizon (NYSE: VZ) climbing 0.33%, and Sprint Nextel (NYSE: S) jumping 3.9% to $5.65. All of the three wireless carriers reported strong demand for the new Apple iPhone.

In the consumer space, Dean Foods (NYSE: DF) tumbled 4.07%, posting the biggest decline in the staples sector, while in the discretionary space Goodyear Tire (NYSE: GT) slumped 4.9% to $12.73 after it was downgraded to a Hold from Buy at KeyBanc Capital Market on uncertainty over expiring Chinese tariffs, as well as declining tire prices.

Also in the discretionary sector, Darden Restaurants (NYSE: DRI) rallied to the top of the S&P 500 Index after the owner of owner and operator of the Red Lobster and Olive Garden restaurant chains posted earnings that topped consensus, while reaffirming its revenue and earnings guidance for the year. Darden jumped 4.6% in the day.

Also on the earnings front, KB Home (NYSE: KBH) surged 16.4% to $15.26 after the homebuilder handsomely beat earnings expectations on revenue that was inline with consensus, thanks to a sharp rise in home prices and a slight gain in new orders.

Materials continued to be drag lower amid worries over global demand. Cliffs Natural Resources (NYSE: CLF) was the worst performing stock in the sector, dropping 3.7% to $40.93. Meanwhile International Paper (NYSE: IP) rallied 2.33% to $35.51 after it was upgraded to a Buy from Hold at Deutsche Bank.

In the industrial sector, transports continued to weighed on performance following earnings warnings from FedEx (NYSE: FDX) and Norfolk Southern (NYSE: NSC) earlier in the week. FedEx lost 0.92%, closing with a drop of 5.7% for the week, while Norfolk Southern fell 1.7%, plunging 12.6% for the week. The railroad company warned of a lower profits amid a drop in coal and merchandise shipments.