WEEK OF MAY. 8 THROUGH MAY. 12, 2023
The S&P 500 index edged down 0.3% this week as investors weighed concerns about the US debt ceiling against data indicating inflation may be slowing. The market benchmark ended Friday's session at 4,124.08, down from last week's closing level of 4,136.25. The index is now up 7.4% for the year to date.
The slight loss came amid investors' worries about the US debt ceiling after Treasury Secretary Janet Yellen said last week that the US government could default if Congress doesn't raise the debt limit.
Still, investors were encouraged by data indicating inflation may be slowing. The April US Producer Price Index rose less than expected, and less than in March. The US Consumer Price Index, another key measure of inflation, rose by 4.9% in April from a year earlier, the Labor Department said, marking a slowdown from a 5% increase in March.
All but two sectors fell this week. The energy and materials sectors had the largest percentage drops for the week, shedding 2.2% and 2%, respectively. Other sectors down by more than 1% each included financials, health care and industrials.
Just two sectors rose on the week -- communication services climbed 4.3% and consumer discretionary edged up 0.6%.
The energy sector's drop came as crude oil futures also declined from last Friday's closing level. Decliners included shares of Occidental Petroleum (OXY), which fell 4.3% on the week as the company reported Q1 adjusted earnings per share below analysts' mean estimate while revenue also missed the Street view.
In the materials sector, shares of International Flavors & Fragrances (IFF) shed 14% as the company reported Q1 adjusted earnings per share below analysts' mean estimate despite higher-than-expected revenue. International Flavors & Fragrances also forecast Q2 sales below the Street view and cut its full-year sales guidance.
Among the sectors in the red this week, consumer staples had the smallest percentage decline, but it might have been in positive territory if not for a nearly 20% tumble in the shares of Tyson Foods (TSN) that marked the stock's worst weekly performance since November 2008. The slide in Tyson's shares came as the meat producer reported it swung to an unexpected adjusted net loss in its fiscal Q2, while sales also missed analysts' expectations. The company also cut its fiscal 2023 sales guidance.
On the upside, the gainers in communication services were led by shares of Google (GOOGL, GOOG), which rose 11% amid the company's annual development conference. At the event, Google said its Google Search volume has been uninterrupted by artificial-intelligence rivals, Oppenheimer analysts said Wednesday in a note to clients.
Next week, companies expected to release quarterly earnings results include Home Depot (HD), Cisco Systems (CSCO), TJX Cos. (TJX), Target Corp. (TGT), Walmart (WMT), Alibaba Group Holding (BABA) and Deere (DE).
The economic calendar for next week features the May Empire State manufacturing survey on Monday, April retail sales and industrial production on Tuesday, April housing starts on Wednesday, and the May Philadelphia Fed manufacturing survey as well as April existing home sales on Thursday.