Market Insights

Dog days of summer, here we come.

Stocks are coming off their quietest week of the year, with the S&P 500 fluctuating just 35 points between its high and low between Friday, May 18 and Friday, May 25. That was the narrowest range since Christmas week.

No catalysts were strong enough to move the broader market, but there were still some noteworthy developments. First, bears hammered the energy patch as inventories rose and Russia signaled a willingness to increase crude-oil production. Second, Congress and the White House passed the widest rollback of bank regulations since the financial crisis.

Third, bond yields retreated from multiyear highs after minutes from the last Federal Reserve meeting suggested policymakers won’t hike rates too quickly. Fourth, nervousness swept Europe as an outsider became Italian prime minister, Spain’s president faced a leadership challenge and Turkey endured a currency crisis.

All told, the S&P 500 rose 0.3 percent last week. The index remained above its 100-day moving average and April high after a sharp rally at the start of May. If the current range holds through Thursday’s close, it will be the second straight positive month.

S&P 500 index, with key moving averages

Semiconductors led the gains after memory-chip giant Micron Technology (MU) raised guidance and announced an aggressive share buyback. Airlines bounced as oil prices fell. Utilities and real-estate investment trusts, valued for their dividends, gained as interest rates fell. Energy was the worst major sector, down 4.5 percent.

In terms of individual companies, a handful of specialty retailers were the biggest movers in the S&P 500. Foot Locker (FL) led the charge with a 29 percent gain as customers proved willing to pay up for costlier products. Tiffany (TIF) ripped 25 percent gain after blowout earnings gave investors confidence the jeweler could draw millennials. Price discipline and strong results also catapulted Ralph Lauren (RL) 19 percent to its highest level in over two years.

Best Buy (BBY) wasn’t so fortunate after management refused to give bullish guidance. That drove the electronics chain down 13 percent and made it the worst performer in the index. Hewlett-Packard Enterprise (HPE) fell 12 percent on profitability worries.

This week is shortened by Memorial Day, but ends with some important economic headlines.

The main events today are consumer confidence and earnings from Salesforce.com (CRM) and HP (HPQ). Tomorrow brings ADP’s private-sector payrolls report, the final reading on first-quarter growth and the Fed’s Beige Book survey of economic conditions. Retail names including Michael Kors (KORS), Dick’s Sporting Goods (DKS) and PVH (PVH) will also issue their results.

Thursday features Costco (COST), Dollar Tree (DLTR) and Dollar General (DG), along with initial jobless claims, personal income and spending and crude-oil inventories.

The week ends with non-farm payrolls and the Institute for Supply Management’s manufacturing index on Friday morning. The American Society for Clinical Oncology (ASCO) also begins its annual conference, which often impacts sentiment in biotechnology stocks.