Stock Report For Week Ended March 7, 2014
Stocks overcome Ukraine worries and end higher
Stocks overcame a sharp pullback in response to a growing crisis in Ukraine and ended the week higher. After a sell-off on Monday, the Standard & Poor's 500 Stock Index moved back into record territory on Tuesday and held onto its gain through much of the rest of the week.
Oil prices surge and stocks tumble after Russia moves into Crimea
The movement of Russian troops into Ukraine's autonomous region of Crimea over the weekend led to a steep drop in world markets on Monday. Investors fled stocks and other risky assets, although a rise in oil prices initially lifted the energy sector. Russia is a major supplier of oil and gas to Europe, and the prospect of sanctions or other disruptions sent the price of both commodities up sharply. Stock prices rallied on Tuesday, however, as Russian President Vladimir Putin seemed to indicate that Russia did not intend to annex Crimea and had no immediate plans for military action.
Stocks regain records as focus returns to the U.S. economy
The calming remarks from the Russian leader—which may have been intended in part to stem a dramatic selloff in the ruble and Russian stocks—allowed investors to refocus on the U.S. economy. Data released Monday showed a rebound in the manufacturing sector in February, while consumer spending on services rose at the fastest pace in 12 years. However, a gauge of nonmanufacturing activity, released Wednesday, showed slowing growth in the services sector.
Better-than-expected jobs report buoy stocks
The official monthly payrolls report helped markets rally in early trading Friday. Employers added 175,000 jobs in February, well in excess of the past two months and more than many observers had anticipated. The unemployment rate ticked up to 6.7%, but the increase was due mostly to a healthy rise in the labor force.
Buyouts of public companies boost stock prices but reduce opportunities for investors
At the end of the week, grocery chain Safeway announced that it was being acquired by a private equity group. Buyouts of public companies in recent years have helped boost stock prices in many instances, but they have also reduced the opportunity set for investors. T. Rowe Price portfolio manager Greg McCrickard notes that this is a particular challenge for small-cap investors, as the number of initial public offerings has not kept pace with the decline in listed companies. Several factors have contributed to the decline, including higher regulatory hurdles and costs for taking a company public and the ready availability of venture capital and other private funding sources.