Flat U.S. Stock Market Saved by Slew of Positive Corporate News

The major U.S. equity markets ended the week only slightly better amid well-below average volume and volatility. A mix of good and bad news controlled the price action as well as general uncertainty ahead of the start of quarterly earnings season. The indexes were set for a lower weekly close, but Friday’s strong performance help reverse the trend, leading to a higher weekly close.

In the cash market, the benchmark S&P 500 Index settled at 2907.41, up 0.5%. The blue chip Dow Jones Industrial Average closed at 26412.30, unchanged and the tech-based NASDAQ Composite finished the week at 7984.16, up 0.6%.

Economic News Fails to Impress Investors

On the economic front, U.S. consumer inflation increased by the most in 14 months in March, but the underlying inflation trend remained muted amid slowing domestic and global economic growth.

According to the U.S. Labor Department, the Consumer Price Index rose 0.4 percent. In the 12 months through March, the CPI increased 1.9 percent. Economists had forecast the CPI rising 0.3 percent in March and accelerating 1.8 percent year-on-year.

The Core CPI inched up 0.1 percent. In the 12 months through March, the core CPI increased 2.0 percent. The core CPI rose 2.1 percent year-on-year in February.

The Labor Department also reported that U.S. producer prices increased by the most in five months in March, but underlying wholesale inflation was muted.

The producer price index for final demand rose 0.6 percent last month. In the 12 months through March, the PPI rose 2.2 percent. Economists had forecast a reading of 0.3 percent in March and an increase of 1.9 percent on a year-on-year basis.

The core PPI increased 2.0 percent in the 12 months through March.

Labor Market Remains Strong

The Labor Department also reported that the number of Americans filing applications for unemployment benefits dropped to a 49-1/2 year low the week-ending April 6. Initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 196,000. Traders were looking for an increase to 211,000.

Dovish Fed Minutes Priced into Market

The latest minutes of the U.S. Federal Reserve’s March 19-20 policy meeting, showed most policymakers viewed price pressures as “muted,” but expected inflation to rise to or near the central bank’s 2 percent target. However, the minutes offered no surprises for investors so stock prices remained stable. If anything, the minutes reinforced the view that rates are likely to remain on hold for the foreseeable future.

Stocks Jump on Solid Bank Earnings, Big Energy Acquisition

The major stock indexes were headed for a weekly loss until Friday’s surge drove the S&P 500 Index 0.69% higher, the Dow Jones Industrial Average 1.04% better and the NASDAQ Composite up 0.49%.

The rally was fueled by a slew of positive corporate news that included strong earnings from J.P. Morgan Chase, which delivered better-than-expected results, Disney’s unveiling of a new streaming service, and the announcement that Dow member Chevron plans to acquire Anadarko Petroleum for $33 billion in cash and stock.

Global News

U.S. stock markets were also supported by stronger-than-expected exports data out of China, which helped dim worries over a possible economic slowdown in the world’s second largest economy.