Dow Winning Streak Ends in Quadruple Witching Session

Quadruple witching brought some volume back to the market, but volatility was absent as a stronger dollar crushed commodity prices and related equities Friday. Gregg Greenberg has The Real Story.

Author:: Melinda Peer
Publish date:: Mar 19, 2010 5:41 PM EDT

NEW YORK (

TheStreet

) -- The

Dow's

winning streak ended at eight Friday. Quadruple witching brought some volume back to the market, but volatility was absent as a stronger dollar crushed commodity prices and related equities.

The

Dow Jones Industrial Average

lost 37 points, or 0.4%, to 10,742 but finished the week ahead, by 1.1%. The

S&P 500

shed 6 points, or 0.5%, to 1160 and gained 0.9% on the week while the

Nasdaq

fell by 17 points, or 0.7%, to 2374 but added 0.3% on the week.

Volume firmed up after a week of sluggish trading, as four different futures and options contracts expire in an occurrence known as "quadruple witching." The Dow had volume of 434.1 million, compared with an average of 200.4 million.

Stephen Wood, chief market strategist for Russell Investments, believes investors are going to have to adjust to a lower-return environment.

"Markets probably recovered higher and quicker than anyone would have thought, but the environment of this recovery will be far slower than recoveries of the past. I always tell my clients: Markets are very efficient, but they aren't always accurate. A lot of this year-round rally has been a correction from the false perception of the 'it's the end of the world' environment.

"Volatility may be absent in the market because the panic is starting to come off," Wood said. "There's stability there. In a low interest-rate, low-return environment, investors will have to look at what asset class mix they'll need in a slow-growth environment," he said.

Wood expects investors to start favoring companies with strong balance sheets that have the ability to take market share.

"2009 was clearly an earnings game, and 2010 is going to be all about revenues -- identifying which companies can now execute and grow after cutting costs," he said.

Overseas, Hong Kong's Hang Seng gained 0.2% and Japan's Nikkei rose 0.8%. The FTSE in London added 0.1% and the DAX in Frankfurt lost 0.5%.

The Economy

Shares across the

financial sector weakened after Goldman Sachs cut first-quarter estimates on major banks and brokerages, citing weak capital markets revenue in February.

Managed care stocks, meanwhile, strengthened as the House of Representatives plans to vote this weekend on the $940 billion

health care reform bill, according to

The Associated Press

. Shares of

Cigna

(CI) - Get Report

WellPoint

(WLP)

and

UnitedHealth Group

(UNH) - Get Report

gained 3.5%, 2% and 2.4%, respectively.

The sector was also helped by

Aetna

(AET)

, which reaffirmed its 2010 profit estimate and forecast better-than-expected first-quarter earnings. The stock jumped 3.7% to $34.46.

In the only economic release of the day, the Economic Cycle Research Institute's weekly leading index rose 13.1% in the week ended March 12, after previous growth of 12.8%.

Company News

Commodity-related stocks were the session's worst performers as a stronger U.S. dollar weighed on prices of hard assets. The Dow's biggest laggards, however, were

(MMM) - Get Report

Pfizer

(PFE) - Get Report

and

American Express

(AXP) - Get Report

Peabody Energy

(BTU) - Get Report

wants to partner with

Coal India

to boost international coal assets. Its stock declined 2.3%, to $47.

Sunpower

(SPWRA)

shares fell 14%, to $18.96 after it gave weak 2010 guidance and reported gross margin deterioration.

Coca-Cola

(KO) - Get Report

United Technologies

and

AT&T

(T) - Get Report

were the Dow's best performers.

Boeing

(BA) - Get Report

said it will accelerate planned production increases for both the 777 and 747-800s planes as global airlines participate in the economic recovery. The shares finished 0.2% lower.

Palm

(PALM)

shares were seeing heavy trading on the Nasdaq after the company disappointed the market with its fourth-quarter sales guidance. The stock shed 29.2%, or $1.65, to $4.

Citigroup

Ford

(F) - Get Report

and

Bank of America

(BAC) - Get Report

were the most heavily traded on the

New York Stock Exchange

, which had a listed volume of 5.2 billion.

Shares of

Best Buy

(BBY) - Get Report

gained 54 cents, or 1.3%, to $40.99 on an upgrade to buy from neutral at Goldman Sachs.

London-based financial services company

Lloyds Banking Group

(LYG) - Get Report

saw shares spike 9.1% to $3.72 after it said it expects to be profitable in 2010.

Samsung Electronics

, the world's largest manufacturer of flat-screen televisions, is seeking double-digit sales growth in 2010.

Apple

(AAPL) - Get Report

is scrambling to line up media content for the iPad ahead of its April 3 release, according to

The Wall Street Journal

. Shares lost 1.1%, to $222.30.

Google

(GOOG) - Get Report

may announce whether it will pull out of China on Monday, according to

China Business News

. The stock slipped 1.1%, to $560.03.

Commodities and the Dollar

The April crude oil contract, which expires Monday, shed $1.52, or 1.9%, to settle at $80.68 a barrel, while the more actively traded May delivery contract lost $1.57, or 1.9%, to settle at $80.97 a barrel.

The April

gold contract lost $19.90, or 1.8%, to settle at $1,107.60 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.7%.