Stocks Log Fourth Straight Down Week


Stocks racked up their fourth straight down week Friday as a Chevron profit warning exacerbated earnings worries. Techs got a boost from an upgrade on the hardware sector.

The Dow Jones Industrial Average shed 0.5 percent Friday, while the S&P 500 lost 0.4 percent. Meanwhile, the Nasdaq gained 0.2 percent.

For the week, the Dow lost 1.6 percent, while the S&P skidded 1.9 percent and the Nasdaq dropped 2.3 percent.

The S&P 500 rallied as much as nearly 40 percent from a fallen back 7.1 percent since its peak on June 12.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended the week at just below 29. The

"While there have been some positive developments, the overriding concern is that we're still in the middle of a recession," Michael Cuggino, president of Permanent Portfolio Funds, told Reuters. "We've got deflationary indicators, commodity prices are coming back down, demand hasn't picked up, inventories are being worked off, (and) unemployment continues to pick up."

Ten out of 10 key S&P sectors finished the week negative. Telecoms were the biggest drag, down more than 4 percent, followed by energy and materials. Health care was the best performer, down just 0.3 percent.

It was an eventful week, marked by GM exiting bankruptcy protection, oil falling below $60 a barrel and earnings season kicking off with Alcoa after the bell Wednesday.

Procter & Gamble had the most positive impact on the Dow this week, up more than 2 percent. ExxonMobil was the biggest drag, down nearly 5 percent.

Year-to-date, General Electric is the worst Dow performer, down 34 percent, while American Express is the best, up more than 25 percent.

In Friday's action, JPMorgan Chase was the biggest decliner on the Dow, falling 3.8 percent.

Chevron wasn't far behind, sliding 2.7 percent, after the energy giant issued a profit warninglate Thursday, saying second-quarter earnings would be hit by a sharp decline inUS refining margins and that any benefits from higher oil prices were largely offset by a weaker dollar.

Adding to the pressure on the energy sector, oil prices fell below $60 a barrel. Crude has fallen more than 10 percent this week, settling at $59.89 a barrel.

Earnings season gets into full swing next week, with results from Intel, JPMorgan, Bank of America, Citigroup and General Electric, among others.

General Motors shot up 38 percent — today alone — ending at $1.15 after the automaker announced that it's out of bankruptcymuch sooner than expected— the process has taken just 40 days, even faster than rival Chrysler's 42-day whirlwind trip in and out of Chapter 11.

The new GM, 61-percent owned by the government, will be much leaner, with only its strongest brands, including Chevrolet, Cadillac, GMC and Buick.

AIG jumped 24 percent, rebounding after getting pummeled last week by short selling after a stock split. The stock had lost half its value after the split on July 1. Meanwhile, the insurer is seeking for the government's permission to resume paying out retention bonuses, on the heels of a warning from Citi that AIG's equity could be worthless. AIG shares fell more than 4 percent premarket.

Cisco rose nearly 1 percent following news it's cutting between 1,500 to 2,000 jobs.

Techs ended mostly higher — and even the Nasdaq eked out a gain — after an earlier boost from a Goldman Sachs upgrade on the hardware. The brokerage raised its rating on the sector to "attractive" from "neutral," citing the potential for the sector to outperform in the typically strong second half.

Among those upgraded were: Dell , Arrow Electronics, Hewlett-Packard and Seagate Technology. The analysts also raised their price target on Apple .

But they cut their ratings IBM and Western Digital.

Alcoa ended a rocky session higher as the company's better-than-expected earnings report couldn't outweight worries over an expected weakness in construction likely to hurt the aluminum giant.

In the day's economic news, the trade deficit narrowed unexpectedly to $26 billionin May, its lowest in 10 years. Meanwhile, import prices rose 3.2 percent in May, while export prices rose 1.1 percent.

And consumer sentiment soured more than expected. The University of Michigan/Reuters consumer-sentiment index dropped to 64.6in a mid-July reading from 70.8 at the end of June. Economists had expected a more modest drop to 70.

Volume was light — it didn't even reach 1 billion shares on the New York Stock Exchange. Roughly 922 million shares changed hands. Decliners outpaced advancers, 15 to 14.

On Tap for Next Week:

MONDAY: Treasury budget; Earnings from Philips Electronics, CSX and Novellus
TUESDAY: PPI; retail sales; business inventories; Earnings from Goldman Sachs, J&J, Intel and Yum Brands
WEDNESDAY: Weekly mortgage applications; CPI; Empire State manuf. survey; industrial production; Fed minutes; Earnings from Abbott Labs and Gannett
THURSDAY: Weekly jobless claims; Philly Fed survey; Earnings from JPMorgan Chase, Nokia, Novartis, Biogen and IBM
FRIDAY: Housing starts; Earnings from Bank of America, Citigroup, GE and Mattel

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