Maybe it's the Super Bowl, or the weather, or just the end of the week, but whatever it was, traders seemed to have taken an early exit on Friday (similar to last Friday), leaving the major indices spilt amid middling volume.
With little to excite investors, the Dow left the record high set on Thursday intact, falling 20.19 to end the week at 12,653.49. For the week, the Dow did very well, up 166 points. The NASDAQ closed 7.50 to the positive, while the S&P 500 gained 2.45.
All three indices posted weekly gains of more than 1%.
With well more than half of all companies having already reported 4th quarter and 2006 earnings, the market will increasingly be driven - for the next 6-8 weeks - by economic news and events outside the financial realm.
Of course, the main concern is still going to be focused on the Middle East and a resolution (or lack thereof) to the conflict in Iraq. Nothing is more important to the world economy presently than what the US decides to do policy-wise with the untenable situation there.
Any good news on that front would likely translate into higher stock prices in the near term, though from the seeming intransigence of the administration to the vacillation in the Congress, the chance for a prompt positive outcome looks neither imminent nor particularly probable.
The recent rise in the price of oil certainly tempered the mood on Wall Street and continues to nag at the merchants on Main Street. Oil rose another 3% on Friday, closing up 1.72 to close at $59.02. Less than 2 weeks ago, the price had dipped to nearly $50, so the recent action (up $9) may be more a technical adjustment than the beginning of a longer term trend.
Since August, the direction has been decidedly to the downside for the slippery stuff, and that trend seems to be still in place. Regardless of daily noise, everybody - from the baker to the banker - would like to see the price stabilize in the $43-50 range. Whether that is attainable or merely wishful thinking depends largely on politics, war, weather and demand in coming months.
The employment report for January revealed unemployment at 4.6%, its highest rate in four months. The Labor Department also reported the addition of 111,000 jobs in the month. Traders barely noticed.
For the week, the news was mostly positive and that was reflected in the trade. Persuading most of it was the Fed decision to keep the Fed Funds rate level at 5.25 on Wednesday. It was the only day to see a big move in either direction - in this case, higher - and was the overriding positive development in an otherwise lackluster series of sessions.