MarketView for September 21

Summary

The major equity indexes ended the day flat on Friday even though there was the beginning of some encouraging news regarding Spain's efforts to seek a bailout. In addition, even the Street appeared to cheer as Apple's newest iPhone went on sale today, driving its shares to a record high.

News from Spain helped lift stocks after the debt-laden country said it was considering freezing pensions and speeding up a planned rise in the retirement age as it raced to cut spending and meet conditions of an expected international sovereign aid package.

The moves, taken with the European Central Bank's efforts to spur growth in the euro zone and the Fed's recent announcement of a third round of quantitative easing, continued to underpin gains.

Apple, the world's largest public company in terms of market capitalization, share price multiplied by the number of shares outstanding, rose to an all-time high of $705.07 as customers lined up to buy the iPhone 5. Apple's shares ended the day up 0.2 percent at $700.10.

Nonetheless, taken in its entirety the market's action has been muted, with the S&P 500 barely moving 0.6 percent in either direction on a daily basis.

A quick and sharp sell-off in spot gold shortly after midday, driven by a rumor that the CME may raise margin requirements on commodities, weighed on financial services stocks. Many banks and other companies in the financial sector have high exposure to gold and other commodities, so any increase in margin requirements would certainly have a negative effect. Meanwhile, spot gold later recovered to trade up 0.6 percent at $1,777.19 an ounce by 1:11 p.m. on Friday, after hitting a session high of $1,787.20 - close to its 2012 high of $1,790.30. However, financial shares were still lower by late afternoon on Friday.

The transportation sector limited the market's advance on Friday, when the Dow Jones Transportation Average fell 1 percent. Earlier this week, two large shipping companies - FedEx and Norfolk Southern warned about the impact of the weakening world economy on their results.

At the close of regular trading on Friday, FedEx had fallen 0.9 percent to close at $84.39 and Norfolk Southern was down 1.7 percent to end the day at $65. On Wednesday, a few brokerage firms cut their price targets on FedEx stock. On Friday, four brokers lowered their share price targets on Norfolk Southern.

The benchmark Standard & Poor's 500 Index has gained 5.9 percent since the start of August, mostly on expectations for new economic stimulus measures from the world's central banks. On September 13, the Federal Reserve announced a third round of stimulus or quantitative easing, known as Q3, intended to bolster the economy and reduce U.S. unemployment.

The market was more active than usual because of "quadruple witching," the quarterly settlement and expiration of four different types of September equity futures and options contracts. Expiration can lead to greater volume and volatility as players adjust or exercise their derivative positions.

Looking ahead to quarterly earnings, one bright spot came from the fashion front. Shares of Michael Kors Holdings rose 9.3 percent to end the day at $57.35. The fashion and accessory designer's company said it will probably earn more than it expected in the second quarter as it banks on strong global sales.

Housing shares climbed, led by KB Home, up 16.4 percent at $15.26, after the fifth-largest U.S. homebuilder reported a surprising quarterly profit and said its revenue backlog hit a four-year high.

Oracle’s shares chalked up a gain 0.7 percent to $32.47 a day after the software maker reported first-quarter earnings, excluding items that met Street's expectations. Nonetheless, Oracle's hardware sales are expected to fall further after a decline of 24 percent from a year ago.

Volume on the three major equity exchanges saw about 7.92 billion shares change hands.