Markets Finish with Solid Weekly Gains…..

U.S. equities finished higher, with all the major indexes posting solid gains for the week. Q4 earnings season approached the end of the final chapter, as Broadcom topped forecasts and issued upbeat guidance, though Zscaler’s billings outlook appeared to overshadow a stronger-than-expected quarterly report, and Costco Wholesale posted mixed results. The economic front offered services sector reports that showed growth was stronger than expected. Treasury yields came under pressure, along with the U.S. dollar, while crude oil prices were higher, and gold rallied. Asia finished out the week in positive fashion, and Europe was mostly higher following some economic data.

The Dow Jones Industrial Average increased 387 points (1.2%) to 33,391, the S&P 500 Index rose 64 points (1.6%) to 4,046, and the Nasdaq Composite was up 226 points (2.0%) to 11,689. In moderate volume, 3.8 billion shares of NYSE-listed stocks were traded, and 4.4 billion shares changed hands on the Nasdaq. WTI crude oil gained $1.52 to $79.68 per barrel. Elsewhere, the gold spot price jumped $21.10 to $1,861.60 per ounce, and the Dollar Index lost 0.5% to 104.55. Markets ended noticeably higher for the week, as the DJIA rose 1.8%, the S&P 500 was up 1.9%, and the Nasdaq Composite rallied 2.6%.

Services sector growth tops forecasts, Treasury yields come under pressure

The Institute for Supply Management (ISM) Services Index dipped but remained in expansion territory in February, denoted by a reading above 50. The index edged to 55.1, compared to the Bloomberg consensus estimate of a dip to 54.5 from January’s 55.2 reading. The key services sector index continued to grow as new orders expanded at an accelerated pace, along with employment, and prices paid decelerated, while business activity fell but continued to grow.

The final S&P Global U.S. Services PMI Index for February was unexpectedly and modestly upwardly revised to 50.6 from the preliminary reading of 50.5, versus forecasts for no change, remaining in contraction territory as denoted by a reading below 50, but above January’s 46.8 figure.

Treasury rates declined, as the yield on the 2-year note was 7 basis points (bps) lower at 4.86%, the yield on the 10-year note decreased 11 bps to 3.97%, and the 30-year bond rate fell 13 bps to 3.89%.

©2023 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.