Market Update

Gordon Achtermann |

The S&P 500 index edged up 0.45% this week, its second consecutive weekly gain, as big banks began the Q3 reporting season on a positive note.

The market benchmark ended Friday's session at 4,327.78, up from last Friday's closing level of 4,308.50. The index is now up 0.9% in October and almost 13% this year.

While this marks the index's second consecutive weekly gain, the increase was slight as investors are weighing stronger-than-expected Q3 bank earnings against concerns about persistent inflation readings and what they might mean for future Federal Reserve rate policy.

JPMorgan Chase (JPM) and Wells Fargo (WFC) both reported Q3 results that topped analyst expectations on Friday but data this week showed September consumer prices and producer prices both came in higher than expected.

Uncertainty over the conflict in the Middle East, where Israel is planning its next move in response to weekend attacks by Hamas that killed about 1,300 people, may have kept investors on edge. The Israeli military has demanded an evacuation of Gaza that the United Nations has warned would deepen a humanitarian emergency.

The energy sector had the largest percentage gain of the week, up 4.5%, followed by a 3.6% rise in utilities, a 2.3% climb in real estate and a 1% increase in industrials. However, three sectors were in the red for the week: Consumer discretionary fell 0.7%, followed by a 0.4% decline in materials and a 0.2% slip in communication services.

The energy sector's climb came as crude oil futures rose as traders look to build a risk premium to the commodity amid rising tensions following Saturday's terror attack on Israel by Hamas. In addition, the US boosted enforcement of the price cap on Russian oil exports, sanctioning two tankers carrying oil priced above the cap.

Gainers in the energy sector included shares of Marathon Oil (MRO), which rose 14% this week as RBC Capital Markets raised its estimate for the company's Q3 earnings per share, citing expected benefits from higher final benchmark commodity prices and production.

In utilities, shares of NextEra Energy (NEE) rose 8.5% as the owner of Florida Power & Light Co. said its board declared a regular quarterly common stock dividend of $0.4675 per share, maintaining its prior rate.

On the downside, the decliners in consumer discretionary included VF Corp. (VFC) and Hasbro (HAS), whose shares fell 4.9% and 4.7%, respectively. Both companies plan to release quarterly results later this month.

Next week, the market will receive earnings reports from a number of large companies including Charles Schwab (SCHW), Johnson & Johnson (JNJ), Bank of America (BAC), Lockheed Martin (LMT), Prologis (PLD), Goldman Sachs (GS), Tesla (TSLA), Procter & Gamble (PG), Netflix (NFLX), Abbott Laboratories (ABT), Morgan Stanley (MS), Philip Morris International (PM), Union Pacific (UNP), AT&T (T) and American Express (AXP).

Also next week, US retail sales for September will be reported, along with September industrial productionhousing startsbuilding permits and existing home sales, among other data.