Last week’s close shows small setback

The S&P 500 and Dow Industrials closed one week ago Friday with small losses, while the NASDAQ Composite eked out a gain after House Republicans, fearing insufficient numbers to pass a health care replacement plan, withdrew their legislation shortly before a scheduled vote.

The setback cast doubt on the passage of President Trump’s other pro-growth policies, including tax reform and infrastructure spending. Friday’s action sealed the S&P 500 with its largest weekly decline since a 1.9 percent loss during the week ending Nov. 4 and its second weekly decline this month. The benchmark index ended the week 2.2 percent below its most recent 2,396 all-time high.

In key economic data last week, the Chicago Fed’s national manufacturing activity index widely topped forecasts, rising to 0.34 in February from -0.02. Readings above zero index signal above-trend growth in the national economy. Existing home sales fell 3.7 percent last month amid scarce inventory of used homes available for sale. In contrast, new home sales jumped 6.1 percent in February, reaching a seven month high, while the median sales price for a new home fell 4.9 percent year-over-year to $296,200. Lastly, durable goods orders rose for a sixth consecutive month, rising 1.7 percent and topping estimates for a 1.4 percent gain.

For the week, the S&P 500 fell 1.4 percent, the Dow Industrials declined 1.5 percent, and the NASDAQ Composite lost 1.2 percent. All but two of the 11 major sector groups ended negative last week, led by Financials (-3.8 percent), Telecom (-1.9 percent) and Industrials (-1.8 percent). Utilities (+1.3 percent) and Real Estate (+0.8 percent) were the only sectors to post gains last week.

The smaller-cap-focused Russell 2000 Index fell 2.6 percent last week. WTI crude oil futures fell 2.7 percent to $47.97/barrel last week, the lowest level since November amid rising U.S. production. Treasury prices advanced a second week, pulling the yield on 10-year Treasury notes down 8.8 basis points to 2.413 percent.

D. Scott Peterson is a fee only investment advisor and CEO of Peterson Wealth Management. He can be contacted at 775-673-1100/775-423-8007 or online at Petersonwm.com.