Market 360: The Best and Worst of the Week for US Equities, Commodities, Currencies, and More
For the week ending Friday, June 27, 2008, the U.S Markets tumbled on low consumer confidence levels, battered financial stocks, interest rates concerns, and new record highs in crude prices. On Friday, the Dow closed at a new low of 11,346.51, the lowestsince 09/07/2006.
The Federal Reserve kept the target rate unchanged at 2.0%, and indicated that inflation and a weak dollar was still a concern which may lead to a rate hike, as the dollar continues to depreciate against the Euro.
Next week, the markets will watch for Euro-zone CPI Monday, and a potential ECB rate hike Thursday, followed by the U.S. jobs report on Thursday, and earnings in H&R Block, Constellation Brands, Apollo Group, and Family Dollar.
Market Moving News:
-General Motors tumbled to 53-year lows on a downgrade, oil breached $140 per barrel & plunging sales, liquidity concerns, and a possible dividend cut. On Thursday, GM’s shares closed at $11.43, the lowest price since 12/05/1974, declining 16.2% for the week, and off 53.6% for the year.
-MasterCard will pay up to $1.8B after it reached a lawsuit settlement with American Express . Shares of both, MA and AXP, fell 4.3% and 7.6%, respectively for the week.
-ComScore tumbled ~23% on Tuesday, after Google revealed its plans to compete against the company by creating a web measurement service. Google and ComScore finished down 3.4% and 22.8% for the week.
-Financials were down for the week on multiple downgrades, and news of job cuts. Citigroup and Goldman Sachs will cut 10% of their banking jobs, and Bank of America will cut 7,500 jobs after it closes the Countrywide deal on July 1st.
-Citigroup and Bank of America had the largest weekly loss, shedding 10.6% and 9.3%, respectively while Goldman shares also fell 5%.
M&A, Deals, Corp Actions:
-Anheuser-Busch rejected Inbev's $46.3 billion bid, stating that it will seek other strategic alliances, and cited that the offer undervalues the company. Shares of Anheuser-Busch slightly moved up 2.6% for the week.
-Nokia reported that it will acquire full ownership of Symbian Ltd., a British cell phone software company valued at approximately $409 million, in a move aimed at creating a competitive advantage over Google .
-Pier 1 Imports withdrew from an $88 million acquisition deal of furnisher rival Cost Plus Inc., deeming the proposal too costly. Shares of Pier 1 Imports fell 19.2% for the week.
-Crude Oil for August delivery settled at record closes 2 days in a row, and surpassed the $140/barrel mark, as it reached an all-time high $142.99/barrel during intraday trading on 6/27, and is currently up 3.58% for the week and has surged more than 46.08% for the year.
**A surge in oil was led by a discontent over Saudi Arabia’s lower than expected oil production, Libya’s output fears, and a continued weaken dollar, despite an increase in EIA’s weekly stockpiles by 800,000 bbls.
-Central Appalachian Coal for October delivery continues to reach new highs, currently at $135.08/ton on 6/26 and up 8.28% for the week, as utilities and steelmakers increase their demand for this old source of energy, but supply constraints remain.
-Wheat for September delivery jumped to a high of $9.56/bushel on 6/27 and is the biggest grain gainer for the week, up 5.25% due to pesticide residue scare from Kansas wheat fields, which have raised crop quality concerns.
**Kansas is the biggest U.S-wheat producing state, with 357.2 million bushels expected to be harvested this summer.
-Coffee for September delivery rallied on speculative buying and rollover activity, with prices edging up 3.58% for the week, and hitting intraday highs of $1.552/lb on 6/26, levels not seen since 3/14, as it reached a three and half month high.
-Cocoa for September traded at an intraday high of $3193/ton on 6/27, levels not seen since February 1980. Cocoa closed up 1.54% for the week as it benefited from this week commodity rally, and traded up on quality concerns and crop output supplies derived from the world’s biggest cocoa grower-Ivory Coast.
Friday, the U.S. dollar edged lower against all major currencies, as weak U.S. economic data and higher oil prices added to investors' fears about U.S. growth. The University of Michigan revised consumer sentiment index for June fell to 56.3 from a previous reading of 56.7, while the price for Crude Oil for August delivery hit an intraday record high of $142.99 per barrel at the NYMEX.
-The dollar index fell ~1% for the week to intraday low of 72.29; its lowest level since June 9th.
-During Friday's afternoon session, the euro traded at $1.5770 per euro, from $1.5757 late Thursday. The euro strengthened 1.2% for the week versus the U.S. dollar as hawkish comments from the ECB President, Jean-Claude Trichet, signaled that a rate hike might be expected during next week's ECB meeting.
-The pound sterling traded at $1.9941 on Friday, from $1.9888 late Thursday, while the Japanese yen was at Y106.07, from Y106.79 late Thursday.
-The dollar fell to its lowest level since June 9th versus the Swiss franc to 1.0192 francs per dollar, helped by news that Russia will increase the portion of the Swiss currency included in its monetary reserve. The Swiss franc has appreciated 10.10% year-to-date against the U.S. dollar.
The Dow ended down -496.18 or -4.19% for the week
-Friday, the Dow closed at 11,346.51, down -106.91 or -0.93%
-The Dow is Negative YTD down -14.46%
-The Dow is off by -2,818.02 or -19.89% from the market peak on October 9th of 14,164.53
The NASDAQ ended down -90.46 or -3.76% for the week
-Friday, the NASDAQ Composite closed at 2,315.63, down -5.74 or -0.25%
-The NASDAQ is Negative YTD down -12.69%
-The NASDAQ is off -543.49 or -19.01% from the market peak on October 31 of 2,859.12
The S&P 500 ended down -39.55 or -3.00% for the week
-Friday the S&P 500 closed at 1,278.38, down -4.77 or -0.37%
-The S&P is Negative YTD down -12.94%
-The S&P is off by -286.77 or -18.32% from the market peak on October 9th of 1,565.15
S&P Sector Performance for the week ending Friday, June 27, 2008:
S&P 500 Energy Sector (.GSPE) Up 8.85 or 1.40%
S&P 500 Health Care Sector (.GSPHC) Down -0.08 or -0.02%
S&P 500 Consumer Staples Sector (.GSPS) Down -5.98 or -2.14%
S&P 500 Utilities Sector (.GSPU) Down -4.84 or -2.34%
S&P 500 Telecomm Services Sector (.GSPTS) Down -3.96 or -2.91%
S&P 500 Information Technology Sector (.GSPT) Down -12.75 or -3.42%
S&P 500 Materials Sector (.GSPM) Down -10.93 or -4.02%
S&P 500 Consumer Discretionary Sector (.GSPD) Down -10.87 or -4.60%
S&P 500 Industrials Sector (.GSPI) Down -19.40 or -6.08%
S&P 500 Financials Sector (.GSPF) Down -19.51 or -6.58%
S&P Top 10 Performers for the week ending Friday, June 27, 2008:
Eastman Kodak Co (EK) Up 2.10 or 16.92%
CenturyTel Inc (CTL) Up 4.45 or 14.34%
Sprint Nextel Corp (S) Up 1.00 or 12.64%
Barr Pharmaceuticals Inc (BR) Up 3.82 or 9.30%
Jabil Circuit Inc (JBL) Up 1.27 or 8.49%
Weatherford International Inc (WFT) Up 3.74 or 8.36%
Newmont Mining Corp (NEM) Up 3.73 or 7.62%
Murphy Oil Corp (MUR) Up 6.39 or 7.11%
Kroger Co (KR) Up 1.75 or 6.51%
Celgene Corp (CELG) Up 3.75 or 6.29%
S&P 10 Worst Performers for the week ending Friday, June 27, 2008:
MBIA Inc (MBI) Down -1.42 or -25.40%
Washington Mutual Inc (WM) Down -1.58 or -24.76%
MGIC Investment Corp (MTG) Down -2.21 or -24.02%
Circuit City Stores Inc (CC) Down -1.02 or -23.83%
Ambac Financial Group Inc (ABK) Down -0.44 or -21.46%
Freddie Mac (FRE) Down -3.97 or -18.19%
Lennar Corp (LEN) Down -2.61 or -17.14%
Rockwell Automation Inc (ROK) Down -8.75 or -16.61%
Terex Corp (TEX) Down -10.15 or -16.51%
General Motors Corp (GM) Down -2.24 or -16.24%
Dow Top Performers for the week ending Friday, June 27, 2008:
Merck & Co Inc (MRK) Up 1.85 or 5.27%
Exxon Mobil Corp (XOM ) Up 1.64 or 1.93%
Chevron Corp (CVX) Up 1.18 or 1.22%
Wal-Mart Stores Inc (WMT) Up 0.04 or 0.07%
Pfizer Inc (PFE) Down -0.05 or -0.29%
Johnson and Johnson (JNJ) Down -0.49 or -0.76%
The Walt Disney Co (DIS) Down -0.37 or -1.16%
McDonald's Corporation (MCD) Down -0.90 or -1.57%
Microsoft Corp (MSFT) Down -0.60 or -2.13%
International Business Machines Corp (IBM) Down -2.69 or -2.19%
Dow Worst Performers for the week ending Friday, June 27, 2008:
General Motors Corp (GM) Down -2.24 or -16.24%
American International Group Inc (AIG) Down -4.35 or -13.55%
The Boeing Co (BA) Down -8.91 or -11.75%
United Technologies Corp (UTX) Down -7.65 or -11.12%
Citigroup Inc (C) Down -2.05 or -10.62%
Bank Of America Corp (BAC) Down -2.51 or -9.26%
Home Depot Inc (HD) Down -2.23 or -8.50%
E I du Pont de Nemours and Co (DD) Down -3.54 or -7.66%
American Express Co (AXP) Down -3.14 or -7.63%
JPMorgan Chase and Co (JPM) Down -2.81 or -7.42%
Key Earnings next week:
Monday: H&R Block (HRB)
Tuesday: Constellation Brands (STZ), Apollo Group (APOL)
Wednesday: Family Dollar (FDO)
Economic Data next week:
Tuesday: Construction Spending, ISM Manufacturing Index
Wednesday: ADP Employment Report, Factory Orders, EIA Crude Inventories
Thursday: Unemployment Rate, Non-farm Payrolls, Hourly Earnings, ISM Non-Manufacturing