August 28, 2014
Wall Street rebounds with small-caps; Dow, S&P 500 dip for week
The Russell 2000 gained 0.6 percent, recovering after once again approaching correction territory, defined as a 10 percent drop from a recent high, earlier in the session.
The week has been marked by small-cap weakness, with the Russell index down 0.4 percent for the week. The Dow and the S&P 500 also slipped for the week, while the Nasdaq rose.
The S&P 500 climbed back above its 50-day moving average near 1,868, an area that has served as support.
Telecom and consumer discretionary sectors led the S&P 500 higher. Shares of Verizon Communications climbed 2.3 percent to $49.07 a day after a regulatory filing showed Warren Buffett's Berkshire Hathaway bought 11 million shares of Verizon in the first quarter.
The Dow Jones industrial average rose 44.50 points or 0.27 percent, to end at 16,491.31. The S&P 500 gained 7.01 points or 0.37 percent, to 1,877.86. The Nasdaq Composite added 21.30 points or 0.52 percent, to 4,090.59.
In earnings news, J.C. Penney Co and Nordstrom Inc both jumped a day after posting earnings that exceeded forecasts. Nordstrom, up 14.7 percent at $70.55, was the S&P 500's biggest percentage gainer. J.C. Penney shot up 16.2 percent to $9.73. The S&P consumer discretionary index advanced 0.7 percent.
For the week, the Dow fell 0.6 percent, the S&P 500 dipped 0.03 percent and the Nasdaq gained 0.5 percent.
Both the Dow and the S&P 500 hit record highs earlier this week. The benchmark S&P 500 is up 1.6 percent for the year.
At the same time, the Russell 2000 remained below its 200-day moving average, a sign of weak momentum. Investors have worried that small-caps' prolonged weakness could be a precursor to broader losses.
Corporate takeover activity propped up European equities, allowing key indexes to recover after a sell-off in the previous session caused by weak economic data in Portugal and Italy.
The pan-European FTSEurofirst 300 index closed up 0.3 percent at 1,361.54 points, recovering from a 0.8 percent retreat on Thursday that had pushed the FTSEurofirst down from a 6-year peak of 1,372.81 points reached earlier this week.
The euro zone's blue-chip Euro STOXX 50 index also rose 0.3 percent, to 3,172.72 points.
Takeover activity has supported European equities this year, and shares in French telecom firms such as Iliad and those of conglomerate Bouygues - which owns Bouygues Telecom - rose on new signs of deals in the sector.
Italy's FTSE MIB equity index, which slumped 3.6 percent on Thursday, recovered slightly to end 1.1 percent higher, while Lisbon's PSI-20 index edged up 0.1 percent after it had fallen 2.7 percent on the previous day.
The dollar held steady against major currencies as US yields stabilized.
The dollar traded at 101.52 yen, down 0.04 percent, and rose against the euro, up 0.1 percent at $1.3695.
Brent crude oil rose above $109 a barrel after a recovery in Libyan oil supply proved short-lived and tension simmered over Ukraine.
Brent crude rose 66 cents to settle at $109.75 a barrel. US crude climbed 52 cents to settle at $102.02.