Last updateWed, 27 Jul 2016 10am

Markets flirt with new highs

A strong employment report helped lift the stock market Friday, even after U.S. Federal Reserve Chairwoman Janet Yellen reported that stock valuations “generally are quite high.”

The Dow Jones industrial average closed at 18,191.11 Friday, ending the week 0.9 percent higher. The Standard & Poor’s 500 index reached 2,116.09 – 28.09, or 1.4 percent, higher than the previous market close and a 0.4 percent gain for the week. Both are close to all-time highs and could march into record territory this week.

Sell in May and go away?

While last week ended on a high note, it was a rough-and-tumble period for Wall Street. The recent volatility is a reflection of how nervous investors are – they’re expecting a correction and don’t want to get caught when the music stops.

Sell in May and go away? It’s an old English custom to get out of the market until the movers and shakers return after horse-racing season.

Investors eye quarterly earnings reports

Investors are watching quarterly earnings for a possible breakout to record Dow Jones industrial average highs. However, one Town Crier “50” company’s earnings didn’t help the bottom line much Thursday.

Yahoo Inc. (YHOO; $43.70) reported results for the quarter ending March 31 last week, with earnings totaling $21.2 million, or 2 cents per share, on sales of $1.2 billion.

Investors looking for positive earnings

After rallying nearly 2 percent in the past two weeks, the agony over Friday’s market sell-off could net positive results. A deluge of earnings reports from major corporations this week will determine the market’s direction.

Major averages make big move

Stocks jumped in volatile trading for the second consecutive week, with the major indexes up approximately 2 percent. That’s in view of a prospective interest-rate hike, a strong dollar and weak earnings reports.

As of Friday, the Dow Jones industrial average was approximately 1.5 percent from its March 2 all-time closing high of 18,288.63. The S&P 500 index was within 1 percent of its March 2 all-time high of 2,117.39.

Corporate Q1 earnings look negative

Stocks snapped a two-day losing streak Thursday as investors digested economic data and prepared for Friday’s jobs report. The news of an accord between Iran and major world powers helped settle the market, which was closed Friday.

History reveals that when the market shutters on Good Friday, the following Monday is historically the S&P 500’s worst post-holiday trading session. Investors focused on the monthly jobs report as the key indicator for the timing of a U.S. Federal Reserve interest-rate increase.

A summer stock correction

After a four-day losing streak, it was encouraging to see the market move back into positive territory Friday morning. Despite the advance, stocks were still set for a weekly loss.

Of concern to investors are potential interest-rate hikes, declining corporate profits and rising geopolitical tensions in the Far East that have weighed down stocks.

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