For the week ending Friday, May 16, 2008, the U.S. Equity Markets ended the week up with all of the major indices up ~2% or more as stocks gained from M&A news, easing inflation worries, and strong earnings results. Oil and gasoline continued to hit new record highs as the dollar declined against major currencies.
Next week the markets will look for direction from the PPI reported on Tuesday, the FOMC Minutes on Wednesday, and ongoing earnings. Campbells, Lowe’s, Home Depot, and Barnes and Nobles are a few of the companies reporting next week.
M&A, Deals, Corp Actions:
- CBS agreed to acquire CNET Networks for ~$1.8 billion in hopes that the acquisition will help the company expand its online reach. CNET shares jumped 48.63% for the week on the news while shares of CBS declined 4.02%.
- Hewlett-Packard announced it will buy Electronic Data Systems for ~$13 billion in an effort to boost its technology services unit and better compete against International Business Machines (IBM). EDS’ stock managed to close up 29% for the week.
- Yahoo’s shares jumped over 5% on Tuesday, after CNBC reported that billionaire investor Carl Icahn may launch a proxy fight with Yahoo. The news came after Microsoft withdrew its $47.5 billion offer to acquire the Internet company last week.
- General Electric plans to auction its appliances business, valued between $5-8 billion, ending over 100 years of GE’s involvement with appliances. General Electric shares finished the week down 0.43%.
- Crude oil set an all-time intraday high at $127.82/barrel, and closed at a new record of $126.29/barrel on 5/16, as June futures were slightly up 0.26% for the week.
**According to AAA, the national average of regular unleaded gasoline hit a new record high at $3.787/gal on 5/16. The national average price of gasoline is up 11% for the past month and up almost 22% from a year ago.
**Diesel hit new records at $4.482/gal on 5/16 as per AAA. Speculation that higher demand for diesel in China is needed to fuel its power plants after this week’s earthquakes led diesel prices to new highs.
- Heating Oil hit a new record close on 5/13, as June delivery contracts settled at $3.6989/gal and is up 1.84% for the week.
- RBOB Gasoline June futures hit a new record close at $3.2235/gal on 5/13 and is up 0.70% for the week.
- On Friday, the U.S. dollar declined versus the euro, Japanese yen and pound sterling, as crude oil prices continue to hit new records. The stronger than expected report of April housing starts did little to help lift the greenback while the low May Consumer Sentiment reading led the greenback to further declines across the board.
- Midday Friday in New York, the euro was at $1.5556 from $1.5444 late Thursday. Comments from ECB governing council member, Axel Weber, suggested that an interest-rate hike remains an option to offset strong price pressures in the euro zone.
- The U.S. dollar was at Y103.72 midday Friday from Y104.72 late Thursday, while the pound sterling was at $1.9560 from $1.9472 late Thursday.
- Highlights: Iceland
- The U.S. dollar lost ground against the Iceland krona on Friday to 74.44 krona, from 77.91 krona late Thursday, as the central banks of Sweeden, Norway, and Denmark agreed to swap up to 500 million euros with Iceland’s central bank. The news comes after Iceland’s central bank has been forced to raise interest rates --currently at 15.5% -- in order to address soaring inflation and rapid growth. The Iceland krona has depreciated over 18% year-to-date against the U.S. dollar.
- The Dow ended up 240.92 or 1.89% for the week
- Friday, the Dow closed at 12,986.80 down -5.86 or -0.05%
- The Dow is Negative YTD down -2.10%
- The Dow is off by -1,177.73 or -8.31% from the market peak on October 9th of 14,164.53
- The NASDAQ ended up 83.33 or 3.41% for the week
- Friday, the NASDAQ Composite closed at 2,528.85 down -4.88 or -0.19%
- The NASDAQ is Negative YTD down -4.65%
- The NASDAQ is off by -330.27 or -11.55% from the market peak on October 31 of 2,859.12
- The S&P 500 ended up 37.07 or 2.67% for the week
- Friday the S&P 500 closed at 1,425.35 up 1.78 or 0.13%
- The S&P is Negative YTD down -2.93%
- The S&P is off by -139.80 or -8.93% from the market peak on October 9th of 1,565.15
S&P Sector Performance for the week ending Friday, May 16, 2008 (All Positive for the week):
S&P 500 Materials Sector (.GSPM) Up 15.17 or 5.60%
S&P 500 Energy Sector (.GSPE) Up 27.10 or 4.30%
S&P 500 Information Technology Sector (.GSPT) Up 14.51 or 3.81%
S&P 500 Consumer Discretionary Sector (.GSPD) Up 9.38 or 3.69%
S&P 500 Telecomm Services Sector (.GSPTS) Up 4.43 or 2.95%
S&P 500 Consumer Staples Sector (.GSPS) Up 6.47 or 2.25%
S&P 500 Industrials Sector (.GSPI) Up 7.47 or 2.18%
S&P 500 Utilities Sector (.GSPU) Up 3.44 or 1.69%
S&P 500 Financials Sector (.GSPF) Up 3.73 or 1.07%
S&P 500 Health Care Sector (.GSPHC) Up 2.59 or 0.71%
S&P Top 10 Performers for the week ending Friday, May 16, 2008:
Electronic Data Systems Corp (EDS) Up 5.47 or 29.00%
Vulcan Materials Co (VMC) Up 11.17 or 16.85%
Fluor Corp (FLR) Up 27.40 or 16.71%
Clear Channel Communications Inc (CCU) Up 4.84 or 16.13%
Constellation Brands Inc (STZ) Up 2.83 or 15.64%
Peabody Energy Corp (BTU) Up 10.23 or 14.91%
Moody's Corp (MCO) Up 5.56 or 14.10%
Tesoro Corp (TSO) Up 3.03 or 13.80%
Tiffany & Co (TIF) Up 5.77 or 13.60%
MEMC Electronic Materials Inc (WFR) Up 8.70 or 13.51%
S&P 10 Worst Performers for the week ending Friday, May 16, 2008:
Ambac Financial Group Inc (ABK) Down -0.53 or -12.10%
Whole Foods Market Inc (WFMI) Down -3.72 or -11.35%
National City Corp (NCC) Down -0.42 or -7.00%
New York Times Co (NYT) Down -1.20 or -6.10%
Electronic Arts Inc (ERTS) Down -3.01 or -5.72%
Regions Financial Corp (RF) Down -1.00 or -4.72%
CBS Corp (CBS ) Down -0.98 or -4.02%
Hewlett-Packard Co (HPQ) Down -1.84 or -3.75%
First Horizon National Corp (FHN) Down -0.36 or -3.51%
SLM Corp (SLM ) Down -0.70 or -3.23%
Dow Top Performers for the week ending Friday, May 16, 2008:
ALCOA Inc (AA ) Up 4.11 or 10.53%
Intel Corp (INTC) Up 1.63 or 6.97%
Exxon Mobil Corp (XOM ) Up 3.85 or 4.33%
Home Depot Inc (HD) Up 1.12 or 4.00%
AT&T Inc (T) Up 1.48 or 3.84%
Chevron Corp (CVX) Up 2.99 or 3.07%
3M Company (MMM) Up 2.34 or 3.07%
International Business Machines Corp (IBM) Up 3.76 or 3.03%
Merck & Co Inc (MRK) Up 1.01 or 2.59%
E I du Pont de Nemours and Co (DD) Up 1.19 or 2.46%
Dow Worst Performers for the week ending Friday, May 16, 2008:
Hewlett-Packard Co (HPQ) Down -1.84 or -3.75%
American International Group Inc (AIG) Down -0.94 or -2.33%
Citigroup Inc (C) Down -0.51 or -2.16%
Bank of America Corp (BAC) Down -0.48 or -1.31%
American Express Co (AXP) Down -0.28 or -0.57%
General Electric Co (GE) Down -0.14 or -0.43%
Wal-Mart Stores Inc (WMT) Down -0.14 or -0.24%
JPMorgan Chase and Co (JPM) Down -0.04 or -0.09%
Johnson and Johnson (JNJ) Up 0.13 or 0.20%
United Technologies Corp (UTX) Up 0.83 or 1.13%
Key Earnings next week:
Monday: Lowe's (LOW), Campbell Soup (CPB),
Tuesday: Home Depot (HD), Target (TGT), Hewlett-Packard (HP)
Wednesday: BJ's Wholesale (BJ), PetSmart(PETM)
Thursday:Barnes & Nobles (BKS), Hormel (HRL), Gamestop (GME), Ann Taylor (ANN)
Economic Data next week:
Monday: Leading Indicators
Tuesday: Producer Price Index, State Street Investor Confidence Index
Wednesday: MBA Purchase Applications, EIA Petroleum Status Report
Thursday: Money Supply, Jobless Claims, EIA Natural Gas Report
Friday: Existing Home Sales