NEW YORK — The stock market’s volatile display Friday is likely to continue into this week, reflecting limited volume as well as investors’ concentration on only a handful of stocks, with the financial sector seeing most of the recent action.
“While volume is light right now, volatility is quite high, so we could see some wild swings in prices if buying and selling programs kick in,” said Kevin Giddis, an analyst at Morgan Keegan & Co.
On Friday, Citigroup Inc., Fannie Mae, Freddie Mac, CIT Group Inc. and Bank of America Corp. topped the New York Stock Exchange’s list of most actively traded, with stocks of all five on the rise, with CIT Group gaining almost 8 percent and Freddie Mac up 7.1 percent.
Stocks brushed off earlier gains to turn lower after a survey of consumer confidence fell to a four-month low. Of the S&P’s 10 industry groups, financials, materials and information technology paced the gains, while health care stocks fronted the losses.
Halting its winning streak after eight consecutive sessions, the Dow Jones industrial average fell 36.43 points, or 0.4 percent, to end at 9,544.20, leaving it with a weekly rise of 0.4 percent. The S&P 500 Index declined 2.05 points, or 0.2 percent, to stand at 1,028.93, up 0.3 percent from the week-ago close, while the technology-laden Nasdaq Composite gained 1.04 points, or 0.1 percent, to 2,028.77, up 0.4 percent.
“Wall Street will most likely be a quiet, lonely place by noon. This is normal for a late-August Friday as traders head for the Hamptons, Cape Cod or other summer resort locations,” said Fred Dickson, chief market strategist at Davidson Cos., in a note to clients early Friday.
“Next week should even be quieter as professional investors normally take the last week of August for vacation ahead of the long Labor Day weekend and the beginning of the school year for many parts of the country,” he added.
“On Monday, just three stocks represented 34 percent of total stock market volume, while Thursday, five stocks garnered the lion’s share of the activity,” noted William O’Donnell, an RBS Securities analyst.
On Wednesday, Citigroup, Fannie Mae, Freddie Mac and Bank of America topped the list of most actively traded stocks, with American International Group also qualifying as a regular on the list this month, according to The Wall Street Journal.
Howard Silverblatt, senior index analyst at Standard & Poor’s, said AIG is on its way to be the month’s best performer on the S&P 500 — with the stock up fully 266 percent for the month to date as of Thursday’s close.
Since Aug. 5, trading in the aforementioned five stocks has averaged about 31.5 percent of the New York Stock Exchange’s consolidated volume, the Journal reported.
The week ahead is called “Junior Traders Week” by many large brokerages firms as senior traders take a break “ahead of what normally is a difficult month for the markets. Trading volume by and large dries up in tandem with the news flow,” Dickson said.
