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The Markets
An uptick in equities on Friday couldn't overcome the four-day downdraft across the board that preceded it. Whether the slump was caused by weak economic data, a fresh outbreak of Middle East conflict, a discouraging report about corporate profits, or simple profit-taking after the previous week's strength, it left the S&P 500 a whisker away from flat for the year and wiped out all year-to-date gains for the Dow industrials. Military action in Yemen, a country situated at a key chokepoint for Middle Eastern oil shipments, was seen as a potential threat to supplies and fueled a bounce in the price of oil. However, anxiety about equities didn't translate into gains for the benchmark 10-year U.S. Treasury note, which remained relatively stable. Gold built on the upswing that began the previous week; it has now gained roughly $50 an ounce in a little less than two weeks.

Last Week's Headlines
• The Bureau of Economic Analysis's final figures confirmed that U.S. growth slowed in 2014's final quarter, dropping from 5% in Q3 to 2.2%. That meant GDP increased 2.4% over all of 2014. The 4.4% increase in consumer spending was the biggest quarterly gain since the first quarter of 2006, but a 12.2% decline in federal defense spending and a 10.4% increase in imports helped offset it. Meanwhile, a 1.6% drop in the quarter's after-tax corporate profits (adjusted for inventories and capital consumption) contributed to an 8.3% annual decline for 2014--the worst year for profits since 2008.
• A 1.4% drop in February durable goods orders--the third decline in the last four months--confirmed a winter slowdown in the economy, according to the Commerce Department. Just as troubling was a 2.6% slump in business spending on capital equipment.
• Fed Chair Janet Yellen confirmed that although the Fed's key interest rate is unlikely to remain near zero for the rest of the year, any increases will probably be very gradual. She cited a number of factors that could keep rate hikes moderate, including the strong dollar, low inflation, and examples of countries abroad who suffered from raising rates prematurely.
• Sales of existing homes rose in February, and ongoing low inventories of homes for sale pushed prices up once again. According to the National Association of Realtors® , February's 1.2% increase put home resales 4.7% ahead of a year earlier. Meanwhile, the $202,600 median home sales price represented a 7.5% gain over the last 12 months, while the housing inventory is half a percent lower than a year ago.
• New home sales also were up by 7.8% in February, and the January figure was revised upward. The Commerce Department said that put sales almost 25% higher than last February, and the 539,000 annual sales rate for new single-family homes hasn't been that high since February 2008.
• After three months of falling consumer prices, consumer inflation turned up 0.2% in February. The Bureau of Labor Statistics said energy, food, and housing costs all contributed to the monthly increase, which left the inflation rate over the last 12 months essentially flat.
• Greek government officials met with major international creditors to try to ensure that more detailed plans for economic reform will be sufficient to qualify for the next round of bailout funds from its major international creditors, which would help with a €460 million payment to the International Monetary Fund that is due on April 9. Meanwhile, Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel struck a conciliatory tone after a one-on-one meeting in Berlin.

Eye on the Week Ahead
U.S. and Chinese manufacturing data and Friday's U.S. unemployment report are likely to be the highlights of the holiday-shortened week as the Q1 earnings season approaches. Overseas, the Yemen situation and any initial reactions to Greece's economic proposals will be monitored.

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All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Prepared by Broadridge Investor Communication Solutions, Inc. 2015.