Stocks Mixed, Tech Down Last Week

Stocks were mixed last week, with the Dow and the Russell 2000 adding value, while the Nasdaq, the S&P 500 and the Global Dow ended the week in the red. Tech shares took a hit as investors prepared for this week’s earnings data from four megacap giants. For the week, communication services, information technology and energy closed lower among the market sectors. Health care and utilities posted the largest gains. The June personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, was somewhat encouraging (see below).

PCE Slightly Up in June, GDP Expanded in Second Quarter

The PCE price index inched up 0.1% in June and 2.5% over the last 12 months. In May, the PCE price index was unchanged, and the 12-month rate was 2.6%. Excluding food and energy, the PCE price index rose 0.2% in June and 2.6% for the year. Last month, both personal income and disposable (after-tax) personal income rose 0.2%. Personal consumption expenditures, a measure of consumer spending, advanced 0.3% in June.
The second quarter’s gross domestic product grew by 2.8%, according to the first, or advanced, estimate. GDP rose 1.4% in the first quarter. The increase in GDP primarily reflected increases in consumer spending (2.3%), private inventory investment (8.4%) and nonresidential fixed investment (5.2%).

Eye on the Week Ahead

The Federal Open Market Committee meets this week, and while it is highly unlikely that the Fed will adjust interest rates at this time, the Committee might provide a more concrete indication as to when rates may be lowered. The employment data for July is also out this week. The labor sector has been steady during the period as the Fed tries to harness inflation.