What a Week: Running to Stand
Still
Stocks started 2006 with a
bang, producing a decent year's worth of percentage gains in just the first
two weeks.
But this sprinting market hit a few hurdles this week, which
ended mixed for the major averages. For the rally to resume in earnest, the
bull will need to show not only that it's got the legs of a long-distance
runner but also the agility to jump over obstacles in its path.
Before fourth-quarter earnings season begins in earnest next
week, signs of strain appeared, notably on Thursday and early Friday. Major
indices made a late-session comeback, however, a sign of bullishness ahead a
three-day long holiday weekend. (U.S. financial markets are closed Monday in
observance of Martin Luther King Day.)
The Dow Jones Industrial Average slid 2.49 points, or 0.02%, to
10,959.87 Friday, rebounding from an earlier low of 10,921. The blue-chip
index managed to close above 11,000 twice this week, but it succumbed to
profit warnings and downgrades of several of its components. For the week, the
Dow fell fractionally.
The S&P 500 index rose 1.55 points, or 0.12%, to 1287.61
Friday, reversing an earlier dip to 1282. The Nasdaq Composite advanced 0.02%
to 2317.04, after falling to an intraday low of 2308. For the week, the
S&P advanced 0.1% and the Nasdaq rose 0.7%.
Some attributed the late week selling pressure to
nervousness about Iran's nuclear ambitions, which helped propel crude oil
prices briefly back above the $65 barrel on Thursday.
But as investors prepared for the next onslaught of
earnings, they were left to ponder if the market had run too far too quickly.
"We may have made three quarters of our gains for the year in just over
the past two weeks," says Jack Ablin, chief investment officer at Harris
Trust.
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