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The Markets This Week

November 18, 2014 | Weekly Commentary

Stocks finished the week modestly higher in quiet trading, a notable contrast to the fireworks of previous weeks. Led by telecom, consumer discretionary, and technology stocks, the Standard & Poor’s 500 index eked out a small rise Friday, but one big enough to reach a new record close.

With the third-quarter earnings season effectively over, investors focused on the continuing plunge in oil prices. Crude fell 4% to $75.82 per barrel last week. Already beaten-down energy stocks slipped 2%. They’re down 14% since midyear.

That’s made investors look at falling crude cautiously and as a risk to stocks, says Quincy Krosby, a Prudential Financial markets strategist. After positive retail numbers came out Friday, the market is starting to view collapsing energy prices as a net positive, she adds. U.S. October retail sales rose 0.3% from September, the Commerce Department said, higher than expectations of 0.2%. This suggests that lower gasoline prices are fattening consumers’ wallets, adds Giri Cherukuri, head trader at Oakbrook Investments.

“Lower pump prices mean consumers have money to spend on other stuff,” he says. A boost came from Wal-Mart Stores ’ (ticker: WMT) better-than-expected third-quarter report Thursday. Domestic comparable sales rose 0.5%.

The Dow Jones Industrial Average rose 61 points or 0.35% to 17,634.74 on the week, and the S&P 500 gained 8 to 2,039.82. The Dow finished off a high reached Thursday. The Nasdaq Composite index rose 56 or 1.2% to 4688.54.

Another bit of positive news Friday was that euro-zone gross domestic product grew 0.2% in the third quarter, more than feared.

(Source: Barrons Online)

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