The Week In Review


August 5, 2011

Volatility continued during Friday's trade, but stocks finished the day in mixed fashion. That made for a dull conclusion to the worst week of trade in more than two years.
Weakness from the prior session's precipitous drop had lingered ahead of today's open, but stocks were able to start the session with strong gains after participants reacted to an encouraging jobs report that showed a headline unemployment rate of 9.1%, rather than the 9.2% rate that had been widely expected... A breakdown of the numbers showed that non-farm payrolls for July increased by 117,000, which is greater than the increase of 84,000 that had been widely anticipated. Prior month payrolls were also revised upward to reflect an increase of 46,000, instead of the 18,000 increase that had been initially reported. As for private payrolls, they spiked by 154,000, which exceeds the 100,000 increase that had been broadly expected. However, once trade opened, stocks were quickly hit with selling pressure as many traders, cognizant that a better-than-expected jobs number won't prevent a possible U.S. debt rating downgrade and skeptical of the market's ability to establish firm footing, opted to capitalize on the opportunity to limit losses. That stirred further selling, which took the three major equity averages down sharply to new 2011 lows and sent the Volatility Index up above 35 for the first time in more than a year... Concerns about the tenuous fiscal and financial state of countries in the eurozone periphery were quelled, at least for a time, by word that the European Central Bank is ready to provide support to Spanish and Italian bonds if the two countries commit to specific reforms. That spurred a rally that took both the Dow and S&P 500 to gains of more than 1% after they had been down more than 2%. The Nasdaq battled back to the neutral line after it had been down more than 3%, but it struggled to poke into positive territory. All three drifted lower into the close, though. The broad market's flat finish to Friday's trade capped off what was otherwise dramatic week of trade, one that saw the S&P 500 surrender a cumulative 7.2%. The Nasdaq shed 8.1% this week, while the Dow ended the week 5.8% lower.

August 4, 2011
U.S. stocks opened sharply lower on Thursday after the government said claims for unemployment benefits fell by 1,000 last week, illustrating only limited improvement ahead of Friday's monthly jobs report. The Dow Jones Industrial Average fell 143 points to 11,752. The Standard & Poor's 500 Index declined 17 points to 1,242. The Nasdaq Composite Index shed 41 points to 2,651. The earnings keep flooding in, and the reports for the most part are better than expected, but investors are fearful of a big worldwide economic slowdown. Apache and Transocean reported solid earnings, yet the stocks are both down over 5%. A recent IPO, Suncoke Energy is down 4% following earnings. Walter Energy is down 23% following earnings. Virtually all the oils and commodity stocks are getting hit. Rowan is down 6% following a downgrade. Parker Drilling is one of the few bright spots, trading up 5% following earnings. Other stocks trading lower following earnings include Tesla Motors, McDermott, Atmel, Zipcar, Goodrich, Cooper Tires, Ares Capital, Dean Foods, GM, El Paso, Southwest Air, CBOE Holdings, Cigna, and Cardinal Health. Every sector is getting hit this morning. Only a handful of stocks are trading higher. After the first hour the Dow was down 200 points. The Nasdaq declined 60 points or 2%. Through the morning the averages remained weak. A few bright spots include Kraft up 3% following strong earnings and the announcement of a split up of the company to unlock more shareholder value. McDonalds also trading in the green for a while before selling back off. At 11:30, the averages pushed lower as the European markets closed. The Dow fell nearly 300 points while the Nasdaq dropped 75 points. There seems to be a lot of capitulation out there. Gold, the one trade that has worked the last several weeks has reversed course. None nothing is working. Hopefully, we are getting closer to a short term bottom. In the afternoon a few brief rallies were immediately met by selling. Not a good sign. As the afternoon progressed there was less and less hope for a rally. In the last hour, a flood of selling. The Dow Jones Industrial Average suffered its' worst-point drop since December 2008, as fears about the global economy sparked a broad selloff that accelerated into the close. The Dow average fell 512 points, or 4.3%, to 11,383, its steepest percentage drop since February 2009. The S&P 500 lost 60 points or 4.8%, to 1,200 also its worst percentage drop since February 2009. The Nasdaq Composite lost 136 points, or 5.1%, to 2,556 points. For the year, all three indexes are now negative.

August 3, 2011
U.S. stocks erased mild opening gains Wednesday as investors drew only limited cheer from a better-than-anticipated report on the labor front. Failing to rebound from its longest losing streak in nearly three years, the Dow Jones Industrial Average dipped again by 9 points to 11,857. The Standard & Poor's Index was neutral at 1,254. The Nasdaq Composite Index gained 3 points to 2,672. The earnings keep coming in better than expected. XL Capital, Big 5 Sports, Lincoln National, CBS, Dennys, MasterCard, Speedway Motorsports, Devon Energy, Pinnacle Entertainment, and Agrium are all trading higher following earnings. MasterCard is trading up 6%. The insurance stocks are also higher, but their good news isn't lending any support to the rest of the financials. In fact, the averages pushed lower after the open as more sellers entered the market. At 10 o'clock, a bounce in the averages following a better than expected manufacturing number did not last. Stocks trading lower following earnings include BRE Properties, Open Table, Boston Beer, Molex, AC Moore, and Frontier Communications. The recent IPO Dunkin Brands is down 2% after reporting their first earnings report as a publicly traded company. After the first hour the averages pushed lower with the Dow dropping 60 points and the Nasdaq declining 20 points. Here we go again. Through the morning the Dow fell as much as 160 points before rebounding. The Nasdaq fell nearly 50 points before rebounding. The Nasdaq and the S&P 500 are now negative for the year. A few stocks are in the green, very few. The one commodity that continues to perform well throughout this correction is gold. In the afternoon the averages slowly improved once again. A lot of volatility today. By the middle of the afternoon the averages battled back to the unchanged level with a couple of techs and financials peaking into the green. In the last hour the bears gave up allowing the bulls to have an up day. The Dow Jones Industrial Average finished up 29 points to 11,896, its first advance in nine sessions. The S&P 500 rose 6 points to 1,260, its first rise in eight sessions. The Nasdaq Composite rose 23 points to 2,693. Some support from earnings and bargain hunters helped offset a bleak round of economic data. All three indexes are now slightly higher for the year; the Nasdaq had lost yearly advances intraday.

August 2, 2011
U.S. stocks started lower on Tuesday as investors worried about the health of the recovery and a potential credit downgrade. Helping foster fears, the Commerce Department reported Americans trimmed their spending in June for the first time in almost two years. Extending its longest losing streak in more than a year, the Dow Jones Industrial Average declined 72 points to 12,060. The Standard & Poor's 500 Index fell 8 points to 1,278. The Nasdaq Composite Index declined 12 points to 2,732. The earnings keep coming in, many trading to the downside. The list includes Vivus, Texas Roadhouse, Martin Marietta, Ben Franklin, HCP, Pinnacle West, Great Wolf Resorts, Parker Hannifin, Gaylord Entertainment, Molson Coors, Pfizer, Archer Daniels, Coach, Emerson, Genesee Wyoming, Hyatt Hotel, and Tenet Healthcare. A few stocks are trading higher following earnings including Herbalife, Rogers Communications, Rowan, Office Max, and Foster Wheeler. In the financial space, National Financial Partners and Principal Financial are higher following earnings. Annaly Capital Management is unchanged following earnings and an upgrade. A lot of jittery investors surrounding that stock and a pending debt downgrade. During the first hour the averages tried to rebound only to sell off once again. Very few stocks are in the green. During the lunch hour the Senate passed the debt reduction bill and yet the averages kept pushing lower. In the afternoon the President signed the new debt limit bill into law and the averages kept pushing lower. In the last hour the Dow fell 200 points. The Nasdaq declined 60 points. Investors seem to be concerned that all the debt limit wrangling may be causing a further economic slowdown. In the last hour the averages sold off into the close. Not pretty. The Dow Jones Industrial Average finished down 265 points, or 2.2%, at 11,866, suffering its biggest one-day point loss since June 1 as investors continued to fret about economic growth. The S&P 500 lost 32 points, or 2.6%, to end at 1,254, down for a seventh-straight session. The Nasdaq Composite fell 75 points, or 2.8%, to 2,669, finishing lower for a third session in a row.

August 1, 2011
U.S. stocks opened sharply higher on Monday with Wall Street cheering a last-minute deal to hike the U.S. borrowing limit. Lawmakers were expected to vote later in the day on the agreement that includes $2.4 trillion in spending cuts over 10 years. Bouncing back after its worst week in more than a year, the Dow Jones Industrial Average rose 92 points to 12,235. The Standard & Poor's 500 Index gained 10 points to 1,303. The Nasdaq Composite Index added 31 points to 2,787. Everything is in the green to start the week. On the earnings front, Allstate is jumping 3% following strong earnings. HSBC is higher on better than expected earnings. All the financials look good. Visa and PNC are higher on upgrades. In the tech space Apple and Google look good. Apple was upgraded. EMC is higher on an upgrade. The commodities look good as well. In the fertilizer space CF Industries, Potash, and Agrium are all higher on upgrades. Cliffs Natural Resources is higher as well. At 10 o'clock, a weak manufacturing number sent the averages into the red. The Dow dropped a quick 100 points. The Nasdaq fell 15 points. We went from everything being green, to very few stocks left in the green. Not a good sign. Through the morning the averages remained weak with the Dow down over 100 points. The Nasdaq declined 30 points. The healthcare and defense areas are experiencing some weakness on government budget cuts. General Dynamics is down over 2%. The healthcare providers like UnitedHealth Group, Humana, and WellPoint are all down over 3%. Tough, tough, market. In the afternoon, heading into the last hour the averages slowly improved with more stocks popping into the green. In the last hour the Dow briefly moved into the green thanks to some grandstanding by the Republican party. The Dow Jones Industrial Average finished down 10 points at 12,132, down for a seventh day, its longest string of straight declines since early July 2010. The blue-chip average had rallied out of the gate, gaining as much as 139 points, after the Obama administration and Congress announced a compromise to lift the debt ceiling and cut spending.. The S&P 500 lost 5 points to 1,286. The Nasdaq Composite fell 11 points to 2,744.