FXstreet

With a full moon and a Friday the 13th capping a week of election surprises at home — like Eric Cantor’s shocking primary loss in Virginia’s 7th Congressional district — and unrest in Iraq, investors would have been excused for acting skittish in Friday trading. But instead, they sent the U.S. equity markets for a daily gain on Friday, leading all three major indices finishing the day in positive territory. Unfortunately, the late-in-week gains weren’t enough to offset losses from earlier in the week, with the Dow, Nasdaq and S&P 500 ending the week in the red.

The Dow closed Friday up 41.55 points, or 0.25%, as the Nasdaq finished up 13 points, or 0.3%, and the S&P closed 6 points, or 0.3%, higher for the day. All three indices traded in positive territory for the majority of the day on Friday, a bit of a surprise given the unrest in Iraq, which has seen Sunni militants seize broad swaths of Iraqi territory — territory that includes much of the country’s oil fields. This, in turn, has sent oil prices to their highest levels this year: Brent crude futures hit $114 a barrel before settling at $113.50 and oil futures went as high as $107 a barrel before eventually settling around $106. Compare this to their Monday prices: Brent crude opened the week closer to $108 a barrel and oil started Monday trading around $103.

While these price jumps would have caused market jitters and consumer panic 10 years ago, John Canally, an investment strategist with LPL Financial, said that progress the U.S. has made with energy independence means that oil at $107 a barrel won’t threaten the country’s economic recovery — and that this, in turn, explains why stocks were in the green for much of Friday trading.

“These days, even versus 2005, we’re using less gasoline. We’re doing a better job in conserving it that way,” Canally said in a phone interview. “We’re still well below the level where it begins to pinch growth,” he added, noting that investors can start to worry if oil prices start pushing $130, $140 and certainly $150 a barrel. Also, he added, oil prices normally rise in the summer — peaking around the Fourth of July, typically — so a small part of oil’s increase can be attributed to that.

“You have to remember we just went through geopolitical unrest in Ukraine – and that sort of fizzled. Right on the heels of that, we have the issue with Iraq, and the market gets used to these things,” Canally said, explaining the market’s relatively muted response to the popping oil prices. They really reacted on Thursday, he noted, but Friday’s action was, in his view, typical Friday trading behavior. “And quite frankly a lot of people are sitting in front of their computers watching the World Cup,” he laughed.

Canally also noted that the relatively positive performance for equities on a day with a full moon and superstitious date — Friday the 13th — might be a surprise to some, but is consistent with prior Friday the 13th’s.

“In general, Friday the 13th has been up. There have been 186 Friday the 13ths since 1901, and 110 finished up, the rest down,” Canally said. “Friday the 13th’s are better than the average day. And if you look at Friday the 13th in June, 12 of 15 since 1901 have been up. In that regard, the fact that we’re having an up day today makes sense.”

While stocks finished in the green on Friday, the gains were not enough to offset losses from earlier in the week — some of which market insiders attributed to Cantor’s loss on Tuesday, some of which can be attributed to Iraqi tensions that escalated on Thursday. The S&P finished the week down 0.74%, the Dow closed the week with an 0.9% loss and the Nasdaq closed the week down 0.33%. For the Dow and S&P, the losses marked the first weekly losses in four weeks for the indices.

On a stock-by-stock level, two of the market’s biggest gainers were OpenTable, which earlier on Friday announced that it will be acquired by Priceline for $2.6 billion, and retailer Express, which sparked investor interest after a private equity firm, Sycamore Partners, disclosed a near-10% stake in the company. OpenTable finished the day over $104 per share, a 48% surge, and Express finished over $16 per share, a 21% gain.


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