United States stocks ended on a flat note on Friday, wrapping up another strong month driven by expectations the Federal Reserve will flood the economy with cash next week.
Investors kept trading to a minimum this week in anticipation of next Wednesday’s announcement. Activity the last several weeks has been heavily influenced by hopes for a large round of asset buying.
While earnings have largely taken a back seat to macroeconomic data, Microsoft Corp’s (MSFT.O) stock rose 1.5 percent to $$26.67 a day after its profit beat estimates on higher sales of its flagship software. [ID:nN28291120]
Investors are betting on volatility to rise after Wednesday’s announcement and have been hedging against unexpected outcomes from the Fed meeting, as well as Tuesday’s midterm elections. The CBOE Volatility Index .VIX climbed about 13 percent this week, even as stocks rose marginally.
“There’s no getting around how big of a week next week is, and it could be an inflection point either up or down,” said Max Bublitz, chief investment strategist at SCM Advisors in San Francisco.
The midterm elections have also garnered investor attention, with polls indicating a Republican takeover of the U.S. House of Representatives. For details, see [ID:nUSVOTE]
On the downside, Dow components Chevron Corp (CVX.N) and Merck & Co (MRK.N), fell after posting quarterly results. Chevron fell 2.2 percent to $82.61 on a weaker-than-expected profit, while Merck lost 1.8 percent to $$36.28 after its sales disappointed investors. [ID:nN29136104] [ID:nN29211606]
The Dow Jones industrial average .DJI added 4.54 points, or 0.04 percent, to 11,118.49. The Standard & Poor’s 500 Index .SPX shed just 0.52 of a point, or 0.04 percent, to 1,183.26. The Nasdaq Composite Index .IXIC edged up just 0.04 point, or 0.00 percent, to 2,507.41.
For the week, the Dow dipped 0.1 percent while the S&P 500 edged up only 0.02 percent and the Nasdaq added 1.1 percent.
For the month of October, though, it was a solid upswing, with the S&P 500 gaining 3.7 percent, while the Dow advanced 3.1 percent and the Nasdaq jumped 5.9 percent.
U.S. economic growth edged up as predicted in the third quarter, but not enough to chip away at high unemployment or change expectations of more monetary easing from the Federal Reserve next week. [ID:nN28207235]
In another snapshot of the economy, the Thomson Reuters/University of Michigan’s survey showed that consumer sentiment weakened slightly in October, dropping to its lowest level in almost a year. [ID:nN29257708]
The week of Nov. 1 marks the final peak week of the third-quarter earnings season, as 94 S&P 500 companies and two Dow components are expected to report.