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Market Recap
WEEK OF MAR. 13 THROUGH MAR. 17, 2023
The S&P 500 index rose 1.4% last week, recovering some but not all of last week's tumble, as some investors saw the recent stock market declines as presenting buying opportunities while a show of support among big banks for First Republic Bank (FRC) also provided some relief.
The market benchmark ended Friday's session at 3,916.64, up from last Friday's closing level of 3,861.59. It is now up 2% for the year-to-date but down 1.3% for March to date.
The S&P 500 slid 4.5% last week amid the collapse of Silicon Valley Bank. Since then, Signature Bank also collapsed, and financial stocks tumbled as investors worried about what other banks might be next. Concerns ramped up last week over First Republic Bank, but on Thursday, a group of 11 banks announced $30 billion in deposits into First Republic Bank in a show of support that helped ease fears a bit. Still, investors remain wary.
The communication services sector had the largest percentage increase last week, climbing 6.9%, followed by a 5.7% rise in technology and a 3.9% increase in utilities. Other sectors in positive territory for the week included consumer discretionary, health care, consumer staples and real estate.
The energy sector led to the downside, falling 7%, followed by a 6.1% drop in the financialsector. The materials sector also was in the red, down 3.5%, followed by a 2.5% decline in industrials.
The gainers in communication services included Facebook parent Meta Platform (META) as the social network operator lowered its 2023 expense guidance amid plans to cut about 10,000 jobs. The company will remove "multiple layers of management" and increase direct reports of each manager, Chief Executive Mark Zuckerberg said in a memo. As a result, Meta now expects 2023 expenses of $86 billion to $92 billion, down from $89 billion to $95 billion previously anticipated. Shares climbed 9% on the week.
In the technology sector, shares of Microsoft (MSFT) rose 12% as the software company disclosed new artificial intelligence-powered functionalities for its Microsoft 365 suite of workplace apps, including Word, Excel and Outlook, to help improve productivity.
On the downside, the energy sector's drop came as crude oil futures also fell. Decliners included Devon Energy (DVN), which fell 11% on the week, and APA Corp. (APA) and Schlumberger (SLB), down 12% each.
In the financial sector, shares of First Republic ended the week down a staggering 72% from last Friday. While investors were relieved to see other banks' efforts to support First Republic, they continued to worry about the bank as it suspended its dividend.
Other regional banks whose shares were hit hard last week included Keycorp (KEY), Zions Bancorp (ZION) and Comerica (CMA), whose shares fell 26% each.
Next week's economic calendar will be light with no major reports expected on Monday and only February existing home sales anticipated on Tuesday. However, the market will be heavily focused on a two-day Federal Open Market Committee meeting that concludes on Wednesday with a rate decision.
Later in the week, February new home sales will be reported on Thursday and February durable goods will come on Friday. Also on Friday, Standard & Poor's is expected to release its final March purchasing managers indexes for the US services and manufacturing sectors.
