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Stock Market Today: Correction? What Correction? Stocks Post Weekly Gain

NEW YORK (TheStreet) -- Wall Street pundits have been crying wolf on a stock market correction for months now, and their cries became louder with Friday's sudden midday pullback. But this wolf still appears to be a long way away. The day's action was nothing more than a sell first, ask questions later situation.

The major U.S. stock markets edged off their worst levels of the day in the final hour of trading Friday and finished the week higher as fears about Russia-Ukraine were balanced by signs that the U.S. economy appears to be on track for a solid, sustained recovery. Bad eurozone economic news has been shrugged off on hopes of more central bank stimulus.

"Given where we are in economic cycle, these pullbacks are likely to be bought, not sold," said John Canally, market strategist and economist at LPL Financial.

The S&P 500 (SPY) was down 0.01% to 1,955.06, closing the week more than 1% higher. The index is now down about just 1.8% from its July 24 all-time intraday high after last Thursday's relatively shallow pullback of 3.9%. The Dow Jones Industrial Average (DIA) was down 0.3% to 16,662.91, adding 0.66% for the week. The Nasdaq (QQQ) ticked up 0.27% to 4,464.93 to gain over 2% for the week.

Stocks did a sudden about-face midday Friday and wiped out opening gains in reaction to an escalation of conflict in Ukraine. According to Bloomberg, Ukraine said its troops attacked and partially destroyed an armed convoy that had crossed the border from Russian territory. The Ukrainian government troops engaged the vehicles that had arrived overnight through a rebel-held section of the border and Ukrainian soldiers continued to come under shelling, including rounds fired from Russia, according to Bloomberg.

MKM Partners' chief market technician Jonathan Krinsky said after the SPX traded up to 1,964 on Friday, just shy of its July 31st high of 1,965, it had seen a "fierce" rejection, trading back near Thursday's low of 1,947 on very aggressive and emotional selling.

The U.S. manufacturing sector remains healthy, according to latest government figures. Industrial output increased by a strong, more-than-expected 0.4% in July. The Empire State Manufacturing Index slid back in August after a substantial gain in July to a still solid 14.7.

The August University of Michigan Consumer Sentiment Index came in lower than expected after the stock market's pullback in recent weeks, but is expected by economists to be upgraded in the final August estimate as stock prices have been rallying again and the labor market appears to be expanding.

In Friday's top corporate headlines, Coca-Cola (KO - Get Report) popped 1.74% to $40.88 and Monster Beverage (MNST - Get Report) surged 30.48% to $93.49 on the announcement that the world's largest soda-maker is paying $2.2 billion in cash for a 16.7% stake in the energy-drink upstart.

Steve Madden (SHOO - Get Report) was ahead by 2.41% to $33.10 after being upgraded at Sterne Agee to buy. Its Dolce Vita purchase should help boost growth, Sterne Agee said.

Ford (F - Get Report) fell 0.69% to $17.31 after announcing a new 83,250 vehicle recall.

--By Andrea Tse in New York

Follow @AndreaTTse

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