Stocks ended mixed Friday, with banks rallying after Congress finally settled on a financial-reform bill. For the week, though, stocks lost 2.9 percent, led by energy.
The Dow Jones Industrial Average ended down 8.99, or 0.1 percent, at 10,143.81 today, while the S&P 500 and Nasdaq ended higher. The CBOE volatility index, widely considered the best gauge of fear in the market, dropped below 29 but was still higher than where it ended last week, at 23.88.
Banks rallied after Congress reached a deal on financial reform, with Bank of America , JPMorgan and Goldman Sachs all up more than 2 percent.
"In the short term, there is not a lot of impact at all," Anton Schutz president of Mendon Capital Advisors, told CNBC of the financial-reform bill. "[E]arnings are not going to be dramatically affected and some of the banks stocks are "very cheap," said Schutz.
The legislation, now called the Dodd-Frank bill, now goes to the full House and Senate for a vote and could be signed into law by President Obama by July 4.
The bill waters down Dem. Sen. Blanche Lincoln's proposal to make banks spin off their swaps-trading desks after several lawmakers threatened to vote against the legislation on the grounds that such a provision would force trading overseas. The compromise allows banks to
The compromise allows banks to stay involved in foreign-exchange and interest-rate swaps dealing, which account for the bulk of the $615 billion over-the-counter derivatives market.
Investors got some mixed signals from the day's economic data: Consumer sentiment rose to its highest level since January 2008, while first-quarter GDP was revised lower. Corporate profits, meanwhile, were more than double the prior estimate, rising 5 percent.
Retailers were mixed as the consumer sentiment data improved, but Rochdale analyst Dick Bove warned that the financial-reform bill will likely hurt consumers.
For the week, consumer discretionary was among the worst performers, down 5.3 percent, while staples fared slightly better, down 3.5 percent.
With earnings season approaching, some pros warned that results may be disappointing.
“We see some further growth, but that growth will decelerate as the easy comparison period is starting to go away,” said Alan Gayle, senior investment strategist at Ridgeworth Investments. “The economic environment ahead appears to be more challenging so we might be losing some momentum as we go into the second half of the year.”
Tech stocks were weak after a disappointing earnings report from Research In Motion.
Research In Motion skidded more than 10 percent after the BlackBerry maker missed its sales target amid increased competition from rivals like Apple.
Apple slipped despite an upgrade: Oppenheimer raised its price target on the stock to $345 from $320, with an "outperform" rating.
Oracle, however, rose 2 percent after the company beat earnings expectationsas sales of new software rose. S&P Equity raised its rating on Oracle to "strong buy" from "buy."