Wall Street had a red day to end January, but it was a productive month for the bulls on the whole. For the day, the Dow closed down 49.84 points, the S&P 500 was off by 3.85 points and the Nasdaq edged 0.18 points lower as the extended rally is looking a little winded and lacking a catalyst to push the Dow and S&P to record highs.
On a weekly basis, the Dow gave back 0.25 percent (-35.40 points), the S&P 500 surrendered 0.32 percent (-4.85 points) and the Nasdaq carved off 0.24 percent (-7.58 points).
From a monthly perspective, the Dow notched gains of 5.77 percent (+756.44 points), the S&P 500 rose 5.04 percent (+71.92 points) and the Nasdaq advanced 4.06 percent (+122.62 points). It was the best percentage-gain January for the S&P 500 since 1989.
A flurry of earnings were delivered during the month that blew past analyst predictions which helped spur the markets higher along with a smattering of upbeat economic data. Friday will kick-off February on a quieter note for earnings. To date, about half of the S&P 500-listed companies have reported with more than 70 percent beating estimates.
On Friday, reporting from Dow and S&P 500 components will be scant, but analysts and investors will be looking for last-quarter performance from Big Lots Inc. (BIG) and Pepco Holdings Inc. (POM). Estimates are calling for earnings per share of $1.99 from Big Lots and 20 cents per share from Pepco.
A couple other household names reporting, will be Foot Locker, Inc. (FL) with estimates of 72 cents per share in earnings and Martha Stewart Living (MSO) with analysts expecting a mere 3 cents per share in earnings.
So what will be market drivers on February 1? More than likely, the market is going to react to news on the economy, considering the heavily watched latest unemployment rate is coming. Friday will bring:
The Employment Situation for January from the Labor Department with economists expecting the unemployment rate to drop from 7.8 percent in December to 7.7 percent in January. Nonfarm employment slipped in December to the country adding 155,000 new jobs, following 161,000 in November and 137,000 in October.
The Institute for Supply Management’s Manufacturing Index for January with economists predicting a flat month compared to December’s 50.7 reading. Readings over 50 signal expansion in the manufacturing sector.
Also on tap to a lesser degree is Reuters/University of Michigan’s Consumer Sentiment Index for January (estimates of a mild increase from 71.3 in December to 71.5).