The Dow closed the trading week with a 113 point gain to 16,314. Trading volume was mixed. Stocks bounced back from a weak Thursday as the Dow shot higher by over 200 points before fading into the close as it appears traders did not want to carry risk into the weekend. The NASDAQ fell today as biotech stocks were hit in follow up action after Hillary Clinton’s remarks about drug prices.
For the week the Dow lost 69 points or 0.43%. Stocks continue to trade in a support range.
The KMS annual conference was today and yesterday. The highlight was a presentation by Sam Stovall of S&P Dow Jones in which he gave historical numbers for the markets and talked about interest rates. Sam mentioned the upcoming 3rd quarter earnings estimates are currently forecasting a decline in profits of close to 4% before a rebound in the 4th quarter. The interesting thing about this however is energy and material sectors are expected to post a 50% profit decline and that if these are removed from the index the remaining sectors to include tech, healthcare, banks and retail are expected to post a 7% profit increase. Thus we see the feast or famin nature of the economy these days. Sam went on the say that October is the month in which most corrections have occurred by also the month in which 32% of all corrections have ended and a new rally was born. I guess only time will tell if this trend plays out again this time. Sam says the S&P research team is thinking the Feds will begin to raise rates by a quarter point in December of this year.