Market RecapWeek of Mar. 28 through Apr. 1, 2022 The S&P 500 closed fractionally higher for the week, extending its winning streak to a third week, as a last gasp to the upside made up for early losses that were tied to lingering concerns about a global recession and the ongoing conflict in Eastern Europe. The benchmark index closed 0.06% higher at 4,545.86 versus last week's close of 4,543.06. For the month, the S&P gained 5.2% in March with the utility sector outperforming with an 11% gain from the month prior. But for the first quarter, the S&P 500 was down 5.6%, making this the worst quarter for the index since 2020. An impressive 34% gain in the energy sector and 5% gain in utilities were overshadowed by losses in the other nine sectors. Stocks were cautiously higher at the start of the week as Russia's war again Ukraine and the siege of the port town of Mariupol continued to hold global financial markets captive. For US investors, the risk that a recession will result from overly aggressive monetary policy was amplified by last week's economic data that suggested the post-pandemic economic surge is fading, causing consumer discretionary stocks like Best Buy (BBY) and Tapestry (TPR) to close with sizeable losses last week. But thanks to impressive gains in the cruise industry after the Centers for Disease Control eased cruise restrictions, the consumer discretionary sector eked out a 0.89% gain. Real estate was the top-performing sector within the S&P with a 4.43% gain for the week. While traditional real estate stocks closed the week with modest gains, the top names were in data storage and cell phone towers. Equinix (EQIX), Iron Mountain (IRM), and SBA Communications (SBAC) all gained more than 6% last week, while REITs were under increasing pressure from rising rates. Utility stocks gained a collective 3.7% with Constellation Energy (CEG) closing the week 7.8% higher and adding to last week's gain after creditors approved its debt restructuring plans. The semiconductor sector gave back last week's gains as investors rotated out of growth stocks and into value stocks amid concerns about a recession and COVID-related shutdowns that spread to China's largest city, Shanghai. Shares of Qualcomm (QCOM), Applied Materials (AMAT), and Advanced Micro Devices (AMD) were the worst-performing stocks in the technology sector with losses of 7%, 7%, and 9.5%, respectively. Thanks to outsized gains in payroll processing firms Paychex (PAYX) and Automatic Data Processing (ADP), the technology sector ended the week with a modest 0.12% gain. Financials, which comprised the worst-performing sector of the week, were down 3.28% as a flattening yield curve undermines banks' interest margins. Last week saw the yield between the 2-yr note and 10-yr note invert and end the week at a negative 8 basis point spread. This inversion was primarily responsible for stocks like Zions Bancorp (ZION) and M&T Bank (MTB) losing as much as 10% last week. Airline stocks got a boost by relaxed COVID travel restrictions, and a 23% rally in Nielson Holdings (NLSN) on a go-private offer helped blunt losses in freight stocks. But the industrial sector erased last week's gain and ended the week 1.5% lower, while energy shares lost a collective 2.4% to make it the second worst-performing sector. Last week's second-tier economic data was eclipsed by the March labor market report which showed the economy added 431,000 jobs. The jobless rate declined to 3.6% while at the same time, wages rose for the twelfth consecutive month. This fueled expectations that the Federal Reserve will hike interest rates 50 basis points in May even as regional data showed signs of a slowing manufacturing sector. Next week's calendar includes data on factory orders (Monday), trade balance (Tuesday), the S&P and ISM services sector PMIs (Tuesday) and the minutes from the March FOMC meeting at which the Fed raised rates by 25 basis points. Provided by MT Newswires
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