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Market 360: A weekly wrap up of the US equity markets, commodities, currencies, and more

For the week ending Friday, April 4, 2008 the US Markets all ended the week up over 3% or more holding on to the gains from Tueday's big rally. This is the third consecutive week of gains for the NASDAQ , something it has not had since October of last year. The Markets soared over 3% on Tues and had their best open to a second quarter since 1938. The Dow and NASDAQ Composite had their third best day of 2008, closing up 391.47and 83.65 points respectively. The S&P 500 had the second best point gain of 2008 as it closed up 47.48 points. The rally cooled on Wed with Fed Chairman Bernanke's congressional testimony that suggested arecession in US was likely.
-Markets appear to have shrugged off a negative jobs report and jobless claims, looking towards another Fed Rate cut with lower inflation.
-Earnings Season kicks off next week with Alcoa reporting after the bell Monday.

Highlights:

  • Economic Data:
    • Bernanke testified to the Joint Economic Committee that a slowdown may be in the works for the US economy for the first half of 2008 and used for the first time the term "recession".
    • Non-farm payrolls fell by 80,000, worse than expected. This was in complete contrast to the ADP numbers that reported an increase of 8,000 jobs in March.Weekly jobless claims jumped to 407,000, the worst reading since Hurricane Katrina. The unemployment rate jumped to 5.1 percent from 4.8 percent.
    • Despite a reading in the ISM Manufacturing Index indicating economic contraction(less than 50), the number was better last month and better than economists had expected coming in at 48.6
  • Housing and Mortgages:
    • Mortgage applications and refinancings fell. The MBA Purchase Index for the week of 3/28 fell 11.8%. Its Refinancing Index fell 38.1%.
    • The 30-year fixed rate mortgage barely moved increasing to 5.75% from 5.74%.
    • Congress is reviewing legislation that would provide aid to homeowners facing foreclosure and help home builders sell off their assets by giving tax credits to home buyers. Homebuilders rallied with Hovnanian (HOV) and Beazer (BZH) having weekly gains above 20%.
  • Sectors:
    • Financials:
      • Lehman Brothers (LEH) shares surged about 16% for the week after company announced it would offer $4 billion of 7.25% convertible preferred stock in order to raise capital. Over subscriptions for new offerings showed demand for Lehman and raised confidence in financial stocks.
      • UBS AG (UBS) reported $19 billion of write-downs and suggested that the worst may be over for investment banks. UBS Shares surged 21.17% for the week.
      • Deutsche Bank (DB) also announced that it would post around $3.9 billion write-downs due to its US mortgage exposure and a shuttered leveraged loan market. DB shares increased 4.47% for the week.
    • Technology:
      • Apple's (AAPL) iTunes became the number one retailer of music according to NPD, displacing Wal-mart (WMT), who is now second and followed by Best Buy (BBY). AAPL is up 7.04% for the week.
        *MySpace signed a deal to do an online with three record labels.
      • Google (GOOG) announced it would cut 25% of its employees at their DoubleClick Unit, which represents 1,200 workers in the U.S. workforce, and another 300 worldwide. Shares of Google increased 7.54% for the week.
      • Research in Motion (RIMM) shares soared after company reported stronger-than-expected 4th Quarter results beating estimates by 2 cents, and more than doubled revenue. RIMM was up 4.03% for the week.
    • Pharmaceuticals:
      • Schering Plough (SGP) shares plummeted on Monday over concerns on the efficacy of its cholesterol-controlling drug, Vytorin. Shares climbed back on Thursday with the news that it planned to eliminate about 10% of its workforce. This cost-cutting plan is projected to generate $1.5 billion in savings over the next few years. The stock is down 17.21% for the week.
  • Corporate Actions/ M&A:
    • Philip Morris International (PM) shares jumped on the first day of trading after company was spun-off from its parent company Altria (MO). They are up 0.61% for the week
    • Altria (MO) shares did not gain from the spin-off as it shares dropped –4.66% for the week.
  • Commodities:
    • Gold fell below the $900 level on Tuesday touching an intraday low of $876.3 an ounce, as some analysts view the decline as a profit-taking correction within a bull market. Gold for June delivery settled at $913.2 an ounce on Friday, down –2.49% for the week.
    • May Corn ended 6.69% higher for the week as it broke a record-high settled price of $6 a bushel on Thursday. The U.S. Department of Agriculture estimates that corn acreage planted for the 2008 spring decreased by 8% from 2007 levels.
    • Soybeans May futures ended the week slightly up 0.77% for the week, after hitting an intraday low of $11.22 per bushel Tuesday, on news that the USDA estimates of soybean acreage planted for this spring increased by 18% from the prior year.
    • Natural Gas Nymex May contracts fell –4.88% for the week on government data suggesting a decrease in demand, as the warm weather season begins.
    • Rough Rice for May delivery continued its bullish trend to finish the week up 4.19%, and settled on Friday at a new record high of $20.50 per hundredweight pounds. Rough rice is now up 47.85% year-to-date.
    • Crude Oil for May hit an intraday low of $99.55 on Tuesday but began to strengthen on Friday as it settled at $106.23 per barrel, showing a slight increase of 0.58% for the week.
      **As per (EIA) the retail average gasoline price stayed at record levels at $3.29 per gallon as of 3/31. AAA saw an increase in regular unleaded of $3.303 per gallon as of 4/04
  • Currencies:
    • Euro - On Monday, the euro hit an intraday high of $1.5893 against the U.S. dollar, nearly matching its record-high price of $1.5901 on March 17, 2008. The euro depreciated -0.47% for the week to $1.5720 on Friday’s afternoon. Weak fundamentals in the United Kingdom released on Monday helped the euro hit an all-time high of .7981 versus the pound sterling. The euro retracted 0.40% against the pound sterling for the week to .7887 on Friday.
    • Pound - The pound sterling depreciated -0.12 for the week against the U.S. dollar to 1.9919 on Friday.
    • Yen - For the week, the U.S. dollar appreciated 2.62% against the Japanese yen, hitting an intraday high of 102.93 yen late on Thursday. On Friday the U.S. dollar lost some ground as the market began to react to expected rate cuts. The yen traded at 101.90 against the U.S. dollar on Friday.
      **The Bank of Japan's Business Survey showed that Business Sentiment among large Japanese manufacturers came in at its lowest level in over four years, due to a decline in stock prices, the strengthening of the yen versus the U.S. dollar, and high oil prices
    • Other Highlights: Chile and Czech Republic
      • Chile’s peso has appreciated nearly 13% year-to-date against the U.S. dollar showing the most strength versus the most traded Latin American currencies (Mexican peso, Brazilian real, Peruvian nuevo sol, Colombian peso, Argentinean peso, and the Venezuelan bolivar fuerte). During late trading Friday, one U.S. dollar purchased 435.50 Chilean pesos.
      • On Friday, the U.S. dollar hit an intraday low of 15.875 versus the Czech koruna, which has appreciated about 12.5% year-to-date. The U.S. dollar record low against the Czech koruna was recorded on March 17, 2008, at an intraday-low price of 15.78.

Market Stats:

  • The Dow ended up 393.02 or 3.22% for the week
    -Friday, the Dow closed at 12,609.42 down -16.61 or -0.13%
    -The Dow is Negative YTD down -4.94%
    -The Dow is off by -1,555.11 or -10.98% from the market peak on October 9th of 14,164.53
  • The NASDAQ ended up 109.80 or 4.86% for the week
    -Friday, the NASDAQ Composite closed at 2,370.98 up 7.68 or 0.32%
    -The NASDAQ is Negative YTD down -10.61%
    -The NASDAQ is off by -488.14 or -17.07% from the market peak on October 31 of 2,859.12
  • The S&P 500 ended up 55.18 or 4.20% for the week
    -Friday the S&P 500 closed at 1,370.40 up 1.09 or 0.08%
    -The S&P is Negative YTD down -6.67%
    -The S&P is off by -194.75 or-12.44% from the market peak on October 9th of 1,565.15
  • S&P Sector Performance for the week ending Friday, April 4, 2008: (All sectors were positive):
    S&P 500 Materials Sector (.GSPM) Up 16.55 or 6.60%
    S&P 500 Financials Sector (.GSPF) Up 21.86 or 6.59%
    S&P 500 Consumer Discretionary Sector (.GSPD) Up 12.63 or 5.27%
    S&P 500 Energy Sector (.GSPE) Up 28.14 or 5.07%
    S&P 500 Utilities Sector (.GSPU) Up 8.25 or 4.32%
    S&P 500 Information Technology Sector (.GSPT) Up 14.45 or 4.18%
    S&P 500 Industrials Sector (.GSPI) Up 13.12 or 3.91%
    S&P 500 Telecomm Services Sector (.GSPTS) Up 4.07 or 2.88%
    S&P 500 Health Care Sector (.GSPHC) Up 6.91 or 1.90%
    S&P 500 Consumer Staples Sector (.GSPS) Up 3.17 or 1.09%
  • S&P Top 10 Performers for the week ending Friday, April 4, 2008:
    Dillards Inc (DDS) Up 5.30 or 31.68%
    CIT Group Inc (CIT) Up 3.20 or 27.59%
    Micron Technology Inc (MU) Up 1.30 or 23.81%
    SLM Corp (SLM) Up 3.33 or 21.97%
    SanDisk Corp (SNDK) Up 4.58 or 21.54%
    Circuit City Stores Inc (CC) Up 0.84 or 21.32%
    Lennar Corp (LEN) Up 3.68 or 20.51%
    Titanium Metals Corp (TIE) Up 2.93 or 19.40%
    Leucadia National Corp (LUK) Up 8.13 or 18.47%
    Allegheny Technologies Inc (ATI) Up 12.60 or 17.65%
  • S&P 10 Worst Performers for the week ending Friday, April 4, 2008:
    Schering Plough Corp (SGP) Down -3.35 or -17.21%
    National City Corp (NCC) Down -1.16 or -11.43%
    Merck & Co Inc (MRK) Down -4.51 or -10.13%
    First Horizon National Corp (FHN) Down -1.12 or -7.59%
    Pall Corp (PLL) Down -2.88 or -7.53%
    Altria Group Inc (MO) Down -1.06 or -4.66%
    NVIDIA Corporation (NVDA) Down -0.90 or -4.57%
    The Bear Stearns Companies Inc (BSC) Down -0.31 or -2.88%
    Gap Inc (GPS) Down -0.47 or -2.41%
    Humana Inc (HUM) Down -1.08 or -2.39%
  • Dow Top Performers for the week ending Friday, April 4, 2008:
    Citigroup Inc (C) Up 3.25 or 15.60%
    American International Group Inc (AIG) Up 4.50 or 10.51%
    General Motors Corp (GM) Up 1.91 or 10.23%
    ALCOA Inc (AA) Up 2.89 or 8.00%
    American Express Co (AXP) Up 2.96 or 6.86%
    JPMorgan Chase and Co (JPM) Up 2.86 or 6.70%
    E I du Pont de Nemours and Co (DD) Up 3.06 or 6.59%
    Intel Corp (INTC) Up 1.08 or 5.19%
    Home Depot Inc (HD) Up 1.41 or 5.15%
    Verizon Communications (VZ) Up 1.66 or 4.64%
  • Dow Worst Performers for the week ending Friday, April 4, 2008:
    Merck & Co Inc (MRK) Down -4.51 or -10.13%
    The Coca Cola Co (KO) Down -0.69 or -1.13%
    McDonald's Corporation (MCD) Up 0.24 or 0.43%
    Hewlett-Packard Co (HPQ) Up 0.31 or 0.67%
    The Walt Disney Co (DIS) Up 0.24 or 0.77%
    Caterpillar Inc (CAT) Up 0.74 or 0.96%
    International Business Machines Corp (IBM) Up 1.19 or 1.04%
    Procter & Gamble Co (PG) Up 1.16 or 1.67%
    AT&T Inc (T) Up 0.82 or 2.18%
    Johnson and Johnson (JNJ) Up 1.55 or 2.42%

Key Earnings next week:

  • Monday: Alcoa (AA)
  • Wednesday: Circuit City (CC), Progressive (PGR), Shaw Group (SGR)
  • Thursday: Genentech (DNA), Pier 1 Imports (PIR), Rite Aid (RAD)
  • Friday: General Electric (GE), Fastenal (FAST)

Economic Data next week:

  • Monday: Consumer Credit
  • Tuesday: Pending Home Sales
  • Wednesday: MBA Purchase Applications, Crude Oil Inventories, Wholesale Inventories
  • Thursday: Trade Balance, Treasury Budget
  • Friday: Export Prices, Import Prices, Consumer Sentiment