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Market 360: The Best and Worst of the Week for US Equities, Commodities, Currencies, and More

For the week ending Friday, May 23, 2008, all major indices declined more that 3% for the week, their worst weekly drop since April 18. The Dow recorded its biggest 2-day point drop since the end of February. Skyrocketing oil prices and news from the Federal Reserves’ FOMC minutes drove the declines. Over 10 billion shares and $200 billion traded this week in the CNBC Million Dollar Portfolio Challenge.

Next week the markets will look to preliminary GDP, Personal Income and Spending numbers. There will be fewer companies reporting earnings, but look to Dell and Costco to report on Thursday.

Highlights:

M&A, Deals, Corp Actions:

  • Belgian brewer InBev approached its U.S. rival Anheuser-Busch with a $46 billion acquisition offer or $65/share. News of merger lifted BUD 9.43% for the week.
  • Time Warner agreed to spin off its cable unit Time Warner Cable (TWC) and will distribute $10.9 billion in dividends to Time Warner Cable shareholders.
  • NRG Energy proposed a deal to acquire Calpine Corp (CPN) for $11 billion in stock. The merger would create the largest power company in the US with a total market capitalization of $22 billion. Calpine which emerged from bankruptcy proceedings in January saw its shares jump 7.83% for the week.
  • Halliburton , the world’s second biggest oil services company, offered to buy U.K oil field service firm Expro International Group for $3.4 billion. Shares of Halliburton traded down 3.46% for the week.
  • BCE Inc , a Canadian Telecommunication giant had the Quebec Court of Appeal reject its buyout offer of the Ontario Teachers’ Pension Plan, as the court found the deal unfair to bondholders. Shares of BCE plummeted 12.39% for the week.
  • Microsoft’s CEO Steve Ballmer stated on Friday that the company is not interested in pursuing a bid on Yahoo , as Microsoft is looking for other possible acquisitions.
  • GE’s NBC Universal and Blackstone Group (BX) are partnering to bid for the Weather Channel cable network for about $3-4 billion. The Weather Channel could potentially be combined with NBC’s own Weather Plus Network. Shares of GE and BX were down 5.29% or 7.81% respectively for the week

Other Market Moving News:

  • Sky high jet fuel prices led to a sell-off in the airlines sector with Continental (CAL), Delta (DAL), UAL Corp. (UAUA), and US Airways (LCC) shedding more than 25% in their stock values for the week. In order to address the spike in fuel costs, companies like AMR are charging fees for checking extra bags, and cutting down capacity. Some airlines see mergers as the only way to survive.
    **Jet fuel costs - the average spot price is now up about 47% for the year.
  • Ford (F) cited that it will cut production of pickup trucks and full size SUV’s by 15-20% as consumers turn to more fuel-efficient cars. Ford shares tumbled 15.29% for the week on negative production news.
  • Pfizer’s (PFE) drug Chantix was banned by the Federal Aviation administration after negative side effects were reported by the Institute for Safe Medication Practices. Shares of PFE fell 2.50% for the week.

Commodities:

  • Crude oil had four consecutive days of record close from 5/16-5/21 and had an all-time intraday high of $135.09/barrel on 5/22. Soaring crude prices are tied to an increased global demand, output shortages, a weaker dollar making oil cheaper overseas, and market speculation.
    **The latest surge in crude comes after OPEC’s president was quoted as saying that his cartel won’t boost its output before its next meeting on September 9th. Crude July contracts rose 4.88% for the week.
    **According to EIA, the national average of regular unleaded gasoline hit a new record high at $3.831/gal on 5/22.
    **As per AAA, the price of regular unleaded gasoline hit new record on 5/23 at $3.875/gal
    **Diesel hit new records at $4.649/gal on 5/23 according to AAA.
  • RBOBgasoline closed at two new records on 5/20 & 5/21, and set an all-time intraday high of $3.43/gal on 5/22. June delivery contracts increased 5.35% for the week.
  • Heating Oil gained 4.4% for the week as June contracts settled at three new records from 5/20-5/22, and hit an all-time high $4.0338/gal during electronic trading on 5/22.
  • Gold for June delivery is -7.82% off from its record close price of $1004.3/ounce set on 3/18/08, but it is up 10.48% year to date as Gold’s inflation hedging role increases with spikes in oil prices.

Currencies:

  • The dollar index, was down 1.29% for the week, trading at late-April levels.
  • The euro continued to gain momentum against the greenback on Friday after hitting a one-month intraday high of $1.5811/euro on Thursday. Midday Friday in New York, the euro was at $1.5773 from $1.5729 late Thursday.
  • Ahead of the long weekend in the United States, the greenback was at Y103.24 yen on Friday from Y104.06 late Thursday, while the pound sterling traded slightly lower at $1.9796 from $1.9810 late Thursday.
  • Dollar Strength? How about Costa Rica
    -As the summer season kicks off, travelers in the U.S. might want to consider Costa Rica as a getaway destination. The U.S. dollar remains relatively strong versus the Costa Rican Colon, with one dollar purchasing 522.20 colons. The greenback has appreciated 5.37% year-to-day versus Costa Rica’s currency.

Market Stats:

  • Dow Jones Industrial Average:
    • The Dow ended down -507.17 or -3.91% for the week
    • Friday, the Dow closed at 12,479.63, down -145.99 or -1.16%
    • The Dow is Negative YTD down -5.92%
    • The Dow is off -1,684.90 or-11.90% from the market peak on October 9th of 14,164.53
  • NASDAQ
    • The NASDAQ ended down -84.18 or -3.33% for the week
    • Friday, the NASDAQ Composite closed at 2,444.67, down -19.91 or -0.81%
    • The NASDAQ is Negative YTD down -7.83%
    • The NASDAQ is off by -414.45 or -14.50% from the market peak on October 31 of 2,859.12
  • S&P 500
    • The S&P 500 ended down -49.42 or -3.47% for the week
    • Friday the S&P 500 closed at 1,375.93, down -18.42 or -1.32%
    • The S&P is Negative YTD down -6.29%
    • The S&P is off by -189.22 or -12.09% from the market peak on October 9th of 1,565.15

S&P Sector Performance for the week ending Friday, May 23, 2008:
S&P 500 Utilities Sector (.GSPU) Down -0.17 or -0.08%
S&P 500 Health Care Sector (.GSPHC) Down -3.25 or -0.89%
S&P 500 Consumer Staples Sector (.GSPS) Down -3.43 or -1.17%
S&P 500 Energy Sector (.GSPE) Down -15.67 or -2.38%
S&P 500 Information Technology Sector (.GSPT) Down -15.47 or -3.92%
S&P 500 Industrials Sector (.GSPI) Down -13.84 or -3.95%
S&P 500 Telecomm Services Sector (.GSPTS) Down -6.11 or -3.95%
S&P 500 Materials Sector (.GSPM) Down -14.09 or -4.93%
S&P 500 Consumer Discretionary Sector (.GSPD) Down -13.91 or -5.28%
S&P 500 Financials Sector (.GSPF) Down -21.58 or -6.14%

S&P Top 10 Performers for the week ending Friday, May 23, 2008:
SLM Corp (SLM ) Up 2.63 or 12.52%
Humana Inc (HUM) Up 4.69 or 10.61%
Anheuser Busch Companies Inc (BUD) Up 4.88 or 9.43%
Compuware Corp (CPWR) Up 0.75 or 8.44%
UnitedHealth Group Inc (UNH) Up 2.43 or 7.52%
Barr Pharmaceuticals Inc (BRL) Up 2.76 or 6.90%
Medtronic Inc (MDT) Up 3.15 or 6.70%
UNISYS Corp (UIS) Up 0.27 or 6.26%
Leggett & Platt Inc (LEG) Up 1.03 or 5.89%
Sovereign Bancorp Inc (SOV) Up 0.44 or 5.45%

S&P 10 Worst Performers for the week ending Friday, May 23, 2008:
Moody's Corp (MCO) Down -10.84 or -24.09%
MBIA Inc (MBI) Down -2.16 or -22.67%
KB Home (KBH ) Down -5.05 or -19.75%
Centex Corp (CTX) Down -4.44 or -18.90%
Lehman Brothers Holdings Inc (LEH) Down -7.53 or -17.25%
Dillards Inc (DDS) Down -3.19 or -16.86%
Ambac Financial Group Inc (ABK) Down -0.63 or -16.36%
Pulte Homes (PHM) Down -2.40 or -16.30%
DR Horton Inc (DHI) Down -2.45 or -15.82%
Lennar Corp (LEN) Down -3.13 or -15.64%

Dow Top Performers for the week ending Friday, May 23, 2008:
The Coca Cola Co (KO) Up 1.56 or 2.73%
Chevron Corp (CVX) Up 0.35 or 0.35%
Exxon Mobil Corp (XOM) Down -1.97 or-2.13%
Procter & Gamble Co (PG) Down -1.48 or -2.22%
Wal-Mart Stores Inc (WMT) Down -1.29 or -2.26%
Pfizer Inc (PFE) Down -0.50 or -2.50%
Caterpillar Inc (CAT) Down -2.15 or -2.57%
Johnson and Johnson (JNJ) Down -1.76 or -2.64%
International Business Machines Corp (IBM) Down -3.62 or -2.83%
Merck & Co Inc (MRK) Down -1.26 or -3.15%

Dow Worst Performers for the week ending Friday, May 23, 2008:
General Motors Corp (GM) Down -3.08 or -14.89%
JPMorgan Chase and Co (JPM) Down -4.21 or -9.05%
Citigroup Inc (C) Down -2.00 or -8.65%
Home Depot Inc (HD) Down -2.33 or -8.01%
ALCOA Inc (AA) Down -2.90 or -6.72%
American Express Co (AXP) Down -3.23 or -6.64%
Microsoft Corp (MSFT) Down -1.94 or -6.47%
Intel Corp (INTC) Down -1.59 or -6.36%
Bank Of America Corp (BAC) Down -2.24 or -6.19%
American International Group Inc (AIG) Down -2.39 or -6.08%

Key Earnings next week:
Tuesday: Vodafone (VOD), Donaldson (DCI)
Wednesday: American Eagle (AEO), Dollar Tree (DLTR), Chico’s Fas (CHS)
Thursday: Costco (COST), Heinz (HNZ), Dell (DELL), Sears (SHLD)

Economic Data next week:
Tuesday: Consumer Confidence, New Home Sales
Wednesday: Durable Goods, ICSC-UBS Store Sales, MBA Purchase Applications
Thursday: GDP (Prelim.), Chain Deflator (Prelim.), Jobless Claims
Friday: Personal Income and Spending, PCE Core Inflation, Consumer Sentiment

More Market Stats