Wall Street remained resilient over the past week even after markets suffered their most punishing days of the year in the middle of the week.
The S&P 500 was down 0.38% over the past five days, the Dow Jones Industrial Average slipped 0.44%, and the Nasdaq fell 0.61%.
Worrying news on the Trump campaign and presidency broke Monday, Tuesday, Wednesday and Friday evenings. The new allegations countered the White House's assertion that the president and his campaign had not colluded with Russia. Those messy political developments in Washington spilled into financial markets on Wednesday in the most punishing day for stocks of 2017. The Dow fell 372 points, while the S&P 500 suffered its worst day since Sept. 9.
The latest flood of distractions appeared to put progress on tax reform on the backburner. Markets had rallied since the November election on hopes over Donald Trump's pro-business agenda.
"It was the first time the markets started to throw in the towel on the regulatory and the tax reform not happening," Tim Courtney, CIO of Exencial Wealth Advisors, told TheStreet. "We could certainly see more of those types of days when it becomes clearer and the odds of these things [happening are] pushed way back into 2018 or never. The markets clearly indicated that they want to see that happen and it's not happening."
The Trump administration's headaches began on Monday evening when news broke that Trump had divulged highly classified intelligence to Russia during a meeting last week. Trump reportedly shared top-secret information on the fight against ISIS with Russian Foreign Minister Sergey Lavrov and Russian Ambassador Sergey Kislyak in a meeting in which U.S. media was barred, according to a report from The Washington Post. The meeting had also raised eyebrows because it occurred just a day after Trump fired former FBI Director James Comey.
Then, on Tuesday, The New York Times reported that Trump had asked Comey to shut down the federal investigation into since-ousted National Security Adviser Michael Flynn. Flynn was forced to resign on Feb. 13 amid questions over his contact with the Russian ambassador and discussions of U.S. sanctions.
Comey wrote a memo detailing his conversation with the president shortly after it took place, according to the Times, which cited two people who read the document. It's part of a paper trail Comey created documenting what he believed to be improper efforts to influence the investigation.
On Wednesday a report from Reuters said former National Security Adviser Michael Flynn and others in Donald Trump's presidential campaign had extensive contacts with Russian officials. According to Reuters sources, Flynn and others on Trump's team made contact with contacts associated with the Kremlin at least 18 times over the final seven months of the election.
On Twitter Thursday, Trump said the investigation was the "single greatest witch hunt of a politician in American history," and complained that the Clinton campaign and Obama administration had not been investigated despite "all the illegal acts that took place."
The Washington Post reported Friday afternoon that a senior White House advisor close to the president is reportedly a person of interest in the investigation into the Trump campaign's possible collusion with Russia. A separate report from The New York Times, published nearly simultaneously, said Trump told Russian officials last week that the former FBI Director James Comey was a "real nut job" and that firing him had relieved him of pressure over the investigation.
Crude oil prices added more than 5% over the past week as hopes for an extension to an output agreement among some of the world's largest producers kept markets buoyant. Energy ministers from Russia and Saudi Arabia surprised markets earlier in the week by calling for an extension to an oil production-cap agreement.
An extension to the Organization of Petroleum Exporting Countries deal will be the main point of conversation when the 13 member countries meet in Vienna on May 25. The current agreement, established last November, is set to expire at the end of June.
U.S. inventories declined for the sixth week in a row. Stockpiles fell by 1.8 million barrels in the week ended May 12, according to the Energy Information Administration. Gasoline and distillate stockpiles also dropped. However, the number of active oil-drilling rigs rose for the 18th week in a row.
Jim Cramer recommends holding onto oil stocks for now, but to be prepared to pull the trigger if crude reaches $53. Get his insights with a free trial subscription to our premium site for investors, Real Money.
Retail names have rounded out the reporting season with a mix of performances. Walmart (WMT) trumped the rest of the retail sector after topping net income estimates, though revenue came in slightly weaker than expected. U.S. same-store sales increased 1.4%. E-commerce business climbed at its best pace in five years.
Foot Locker (FL) reported a decline in quarterly profit and meager growth in sales. CEO Richard Johnson conceded that the quarter "did fall short of our original expectations." He blamed a slow start in February tied to a delay in income tax refunds. Dick's Sporting Goods (DKS) missed same-store sales estimates over its recent quarter. The sports retailer reported an increase in same-store sales of 2.4%, below an expected growth rate of 3.5%.
Alibaba (BABA) investors focused more on the Chinese internet giant's lower-than-expected earnings for the 2016 fourth quarter, rather than its significant top-line growth. Earnings of 63 cents a share missed estimates by 3 cents. Revenue surged 60% to $5.6 billion, $400 million above consensus.
Ralph Lauren (RL) reported a better-than-expected quarter, Gap (GPS) surpassed analysts' estimates over its first quarter, Urban Outfitters (URBN) reported disappointing quarterly sales, and American Eagle Outfitters (AEO) issued disappointing guidance for its second quarter.
TJX (TJX) reported disappointing quarterly sales and weak guidance, while Target (TGT) topped quarterly estimates. Staples SPLS saw same-store sales top estimates, though total sales came in slightly below. Home Depot (HD) exceeded quarterly expectations and projected a solid full-year outlook