Stocks end mixed, but post best week of 2016
Stocks, perhaps a little winded by a massive rally earlier in the week, turned in an uninspiring showing Friday as investors reacted to softer oil prices and digested a fresh reading on inflation at the consumer level that could influence interest rate policy.
But that couldn't spoil the market's best weekly performance yet in 2016.
After falling 40 points Thursday and snapping a three-session winning streak that saw the Dow Jones industrial average soar nearly 800 points, the blue chip barometer slipped 21 points, or 0.1%, to 16,392 Friday. The broader Standard & Poor's 500 stock index was almost unchanged and the tech-packed Nasdaq composite rose 0.4%.
Despite the snoozer of a finish, all three market measures posted their biggest weekly gains yet in 2016. The Dow gained 2.6% in the holiday-shortened week, the S&P rose 2.8% and the Nasdaq jumped 3.8%
Wall Street seems to be in wait-and-see mode following the big relief rally, and many of the major U.S. stock indexes look like they are in pause mode as well, as the fourth-quarter earnings season winds down and traders see how recent developments in the oil patch play out.
"Equities follow oil lower on both sides of the Atlantic," is the way Bespoke Investment Group summed up Friday trading for clients in a note.
Some equity pros say the market is in a so-called "consolidation" phase, where it kind of trades sideways and more quietly after a big run-up.
In fresh economic news, the January consumer price index, or CPI, was unchanged, a tad better than the 0.1% drop economists had forecast. The so-called core CPI, which strips out food and energy costs, rose a bigger-than-expected 0.3%, or a year-over-year pace of 2.2%. The stronger inflation reading could have implications for Federal Reserve interest rate policy, as a big reason the nation's central bank has been holding off on more interest rate hikes is due to still-weak inflation readings.
Consumer prices were unchanged in January but core prices up 0.3%
"This CPI report will feed into the Fed’s inflation concerns and will cause the Street to lift the probability of a March rate hike," Steven Ricchiuto, chief economist at Mizuho Securities USA, told clients in a report.
Investors were also paying attention to falling crude prices, as the correlation between oil prices and stock prices continue to move in the same direction. Friday, the price of a barrel of U.S.-produced crude was back below the key $30 mark. Oil finished down 3.7% to $29.64 a barrel but was virtually flat for the week.
Tech investors were also reacting to news that the board of troubled Internet company Yahoo has formed an independent committee to explore "strategic alternatives," which in Wall Street-speak normally means a potential sale may be in the works.
Stocks in Europe were also finishing a strong week on a weak note. The broad Stoxx Europe 600 index was down 1.2%. Germany's DAX index was down 1.3% and the CAC 40 in Paris was 1.2% lower.
Adam Shell on Twitter: @adamshell.