May 3, 2015
The major U.S. equity benchmarks retreated from the record highs they had established the previous week due to some disappointing earnings reports and as investors reacted to mixed economic data. A strong rally on Friday helped mitigate the losses, however. The technology-heavy Nasdaq Composite trailed the large-cap indexes, weighed down by poorly performing social media stocks and concerns over Apple’s new smartwatch. Small-caps also performed poorly and surrendered their recent outperformance, perhaps due the waning appeal of their greater focus on domestic markets. The U.S. dollar retreated during the week and for the month of April, increasing the value of profits earned overseas by U.S. multinationals.
The week brought confirmation that the economy had experienced another sharp winter slowdown, with bad weather probably partly to blame. Stocks declined Wednesday morning, following news that the economy had only grown at an annual rate of 0.2% in the first quarter, well below even reduced expectations. Following their meeting the same day, Federal Reserve policymakers referred to the slowdown as “transitory,” which may have helped shore up investor confidence in the recovery.