Week ending June 2: Volatility continues to hound investors.
Another dose of mixed economic data on inflation left markets confused about the fate of interest rates. The Morningstar US Market Index managed to add 0.83% for the week ending June 2, as volatility continues to hound investors.
All nine Morningstar style indexes ended the week with modest gains. Mid-cap stocks outperformed their large- and small-cap peers, as the Morningstar Mid Cap Index posted a gain of 1.21%. Among the other style indexes, the Morningstar Value Index continued to maintain its dominance over its Core and Growth brethren with a 1.09% gain.
Biotech firm Celgene CELG added another 6.08% on top of last week's 6% gain on news of FDA approval for Thalomid in cancer treatment. This helped turn the fortunes of the Morningstar Mid Growth Index from being the worst-performing index last week to being the best this week, with a gain of 1.38%. The index would have fared even better if it were not for the disappointing performance of two technology companies--Novell NOVL and Advanced Micro Devices AMD. Novell, the network and security software maker, dropped 20.08% on a weak forecast for the third quarter as the firm struggles to adapt to the open source era led by rival Red Hat RHAT. And Advanced Micro Devices shed 4.84% after a strategy call with analysts failed to dispel concerns about a price war with Intel INTC.
The Morningstar Large Core Index gained a modest 0.21% to claim the position of worst-performing index. Ironically, index member Kinder Morgan KMI jumped 19.77% on news of a buyout and was the second largest gain of any stock last week. But consumer stocks Coca-Cola KO and Procter and Gamble PG and retail chains Wal-Mart WMT and Home Depot HD all finished lower to hold the index back.