Rising geopolitical tensions and violence in global hot spots slowed, but didn’t deter, stocks from finishing a touch higher on the week. Trading was choppy amid heightened concerns about Ukraine and the Middle East, but the broad market rose 0.3% on light summer volume.

Friday saw a recovery from lows the day before, when investors scattered in the wake of loud Russian saber-rattling over the ongoing unrest in Ukraine and the U.S. authorization of airstrikes in Iraq. Shares ended higher than the week’s lows, but below the highs they reached Monday.

Seemingly ignored were continued good second-quarter earnings reports and strong U.S. macro-economic data, such as falling jobless claims and a better-than-expected non-manufacturing expansion number.

The broad rebound was led by a revived utilities sector, suggesting that many investors are seeking safer equity bets. This is supported by the weekly rise in Treasury bond prices as well, even though investors generally expect interest rates to rise in the coming 12 months. The question, of course, remains when.

Last week, the Dow rose 61 points, or 0.4%, to 16,553.93, and the S&P 500 index climbed 6.44 points to 1931.59. The Nasdaq Composite rose 18, or 0.4%, to 4370.90.

Friday saw a relief rally on easing fears about what the U.S. might do militarily in Iraq and the escalation in Ukraine, says Malcolm Polley, president of Stewart Capital Advisors. With the stock market price/earnings ratio “not cheap” at 16 times, interest rates at a secular bottom, and risks of war seemingly all around, “…equity investors don’t know where to go,” so it’s no surprise that safer utility shares rallied.

(Source: Barrons Online)