A two o’clock selloff sent the major stock market indices into the red, until the final hour of trading reversed the trajectory.
With the last day of the month arriving earlier than usual in February, this month’s fund rebalancing combined with news that Russia had invaded Crimea to catch investors off-balance. The stock market went from record highs – all the way down into the red, although the last hour of the session lured bargain hunters who saw the dip as a buying opportunity.
The Dow Jones Industrial Average (DIA) picked up 49 points to finish Friday’s trading session at 16,321 for a 0.30 percent advance. The S&P 500 (SPY) climbed 0.28 percent to a new, record-high close at 1,859.45 after reaching a record intraday high of 1,867.92.
The Nasdaq 100 (QQQ) took a 0.10 percent dip to finish at 3,696. The Russell 2000 (IWM) declined 0.41 percent to end the day at 1,187 – despite hitting a record intraday high of 1,193.50.
In other major markets, oil (USO) advanced 0.14 percent to close at $36.74.
On London’s ICE Futures Europe Exchange, April futures for Brent crude oil advanced 12 cents (0.11 percent) to $108.66/bbl. (BNO).
April gold futures declined $3.80 (0.29 percent) to $1,328.00 per ounce (GLD).
The transportation sector benefitted from a new batch of dilithium crystals during Friday’s trading session, as the Dow Jones Transportation Average accelerated 0.44 percent to 7,348, climbing further above its 50-day moving average of 7,300 (IYT).
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks declined as the yen strengthened to 101.82 per dollar just before Friday’s closing bell in Tokyo, as a result of the situation in the Ukraine. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average declined 0.55 percent to 14,841 (EWJ).
In China, stocks climbed out of the red during the final hour of the trading session, as magical thinking kicked-in ahead of Saturday’s release of the government’s “official” manufacturing PMI report for February. The Shanghai Composite Index advanced 0.44 percent to 2,056 (FXI). Hong Kong’s Hang Seng Index rose 0.04 percent to 22,836 (EWH).
In Europe, stocks advanced as disinflation anxiety was relieved with Eurostat’s release of its monthly inflation report, which indicated that the Eurozone’s annual inflation rate remained at 0.8 percent. Although the reading was far below the European Central Bank’s targeted rate of 2.0 percent, economists had expressed concern that the rate could have fallen as low as 0.6 percent. The Euro STOXX 50 Index finished Friday’s session with a 0.46 percent advance to 3,149 – climbing further above its 50-day moving average of 3,085. Its Relative Strength Index is 62.78 (FEZ).
Technical indicators revealed that the S&P 500 rose further above its 50-day moving average of 1,820 after finishing Friday’s trading session with a 0.28 percent advance to a record-high close at 1,859.45. Its Relative Strength Index (RSI) rose from 62.62 to 64.09. The MACD and the signal line are climbing further above the zero line, suggesting that the S&P could continue its advance during the immediate future.
On Friday, all sectors advanced, except for the healthcare sector, which remained unchanged.
Consumer Discretionary (XLY): +0.41%
Technology: (XLK): +0.11%
Industrials (XLI): +0.19%
Materials: (XLB): +0.34%
Energy (XLE): +0.50%
Financials: (XLF): +0.51%
Utilities (XLU): +0.70%
Health Care: (XLV): unchanged
Consumer Staples (XLP): +0.69%
Bottom line: The last day of February brought a wild trading session as stocks went from record highs – all the way down into the red, before a rebound occurred during the last hour.
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