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Stocks Edge Up, Investors Trade Cautiously as the End of the Quarter Approaches

Weekly Update – September 24, 2021

  • The S&P 500 index edged up 0.5% last week, with the energy and financial sectors leading to the upside while real estate and utilities weighed.
  • The market benchmark ended the week at 4,455.48, up from last Friday’s closing level of 4,432.99. This marks the index’s first weekly gain in three weeks and erases only part of the declines posted earlier in the month.
  • The S&P 500 is now down 1.5% for September, with four sessions in the month remaining. Despite the September slide, the index is up about 19% for the year to date.
  • The week’s move was slight as investors traded cautiously heading into the end of Q3. In the US, the Federal Reserve’s Federal Open Market Committee indicated it may begin tapering its asset purchases as soon as November and could raise interest rates next year. Overseas, investors continued to worry about Chinese property markets.
  • The energy sector had the largest percentage increase of the week, up 4.7%, followed by a 2.2% rise in financials and a 0.9% advance in technology. Other sectors that rose last week included industrials, consumer discretionary, and materials.
  • On the downside, real estate led with a 1.5% drop while utilities slipped 1.2%. Other decliners included communication services, health care, and consumer staples.
  • The energy sector’s advance came as crude oil futures rose. Among the gainers, shares of Diamondback Energy (FANG) added 7.4% on the week while Devon Energy (DVN) jumped 11%.
  • In the financial sector, shares of American Express (AXP) climbed 7.2% as the company said it is committing to a goal of net-zero carbon emissions by 2035.
  • In real estate, Prologis (PLD) shares shed 1.7% as Evercore ISI downgraded its investment rating on the logistics real estate company’s stock to in-line from outperform.
  • Among utilities stocks, Entergy (ETR) shares fell 9.2% as the company said the repair and replacement of electrical infrastructure damaged by Hurricane Ida are expected to cost $2.1 billion to $2.6 billion. The Gulf Coast utility also lost $75 million to $85 million of non-fuel revenue as a result of the power outages caused by the hurricane, according to the company’s statement.
  • Next week, the final week of Q3, investors will get August readings on durable goods orders and core capital goods orders on Monday, followed by the September consumer confidence index on Tuesday and the August pending home sales index Wednesday. Thursday’s economic data will feature revised Q3 gross domestic product while Friday will include August readings on consumer spending and core inflation, among other data.
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