The Losing Streak Is Over

By Alex Eule |  Friday, May 27 Eighth Time's the Charm. For the first time in two months, stocks ended Friday with a weekly gain. After rallying 2.5% today, the S&P 500 finished the week up 6.6%. The Nasdaq Composite also snapped a seven-week losing streak, rising 6.8% on the week, while the Dow Jones Industrial Average (+6.2%) snapped an eight-week streak of declines. It's the first time since November 2020 that all three indexes have gained more than 6% on the week.  Investors found some good news in the latest government report on personal consumption expenditures, or PCE, which grew 0.9% in April. That's still elevated, but it's off March's 1.4% rate, spreading hope that inflation could be peaking. The Federal Reserve looks to PCE as its key inflation gauge when making monetary policy decisions.   It was another good day for retail stocks, with Ulta Beauty pacing the S&P 500 today with a 12.5% gain. The cosmetics retailer easily beat Wall Street estimates in its latest quarter, and the company lifted its forecast for the year, as well. Barron's Teresa Rivas explains the significance and why investors might find broader hope in the results:  So-called beat-and-raise quarters have been relatively rare this earnings season, which has been dominated by companies warning of pressures on both the supply and demand sides of their businesses. That makes Ulta’s numbers, which echo upbeat results from fellow beauty retailer e.l.f. Beauty on Wednesday, a welcome bright spot. Teresa notes the retail rally is largely focused on the stores helping consumers dress up again -- good news for department stores Macy's and Nordstrom -- but not so good news for Walmart and Target, which are more focused on the kind of everyday wear that consumers spent the early part of the pandemic stocking up on. "Consumers, especially wealthier ones, are choosing dresses over jeans," Teresa writes. Consumer discretionary was the best performing sector in the S&P 500 on the day, helped by not just retailers but also travel companies. Carnival, Norwegian Cruise Line Holdings, and Royal Caribbean were all up about 5%. The rally extended to the airlines, including American Airlines (+5.2%), United Airlines(+5.1%), and Delta Air Lines (+3.4%).   Have a good weekend. Markets are closed for Memorial Day on Monday and Review & Preview will be taking the day off, as well. We'll be back in your inbox on Tuesday night. Watch our weekly TV show on Fox Business Saturday or Sunday at 10 a.m. or 11:30 a.m. ET. This week, an interview with Adam Seessel, founder and CIO of Gravity Capital Management, on finding bargains after the market's plunge. Plus, what's ahead for Snap after a rough week.

 

DJIA: +1.76% to 33,212.96 S&P 500: +2.47% to 4,158.24 Nasdaq: +3.33% to 12,131.13 The Hot Stock: Ulta Beauty +12.5% The Biggest Loser: Bristol-Myers Squibb -1.9% Best Sector: Consumer Discretionary +3.4% Worst Sector: Consumer Staples +1.2%