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

For the week ending Friday, July 25, 2008, the markets closed mixed for the week, on negative housing data, and mixed earnings results. An early rally in financial and airlines stocks, supported by the continued slide in oil prices, was quickly wiped away by ongoing uncertainty in the economy. The Dow dropped more than 280 points on Thursday, marking the worst one day point drop in over a month. However, Friday saw a slight rebound on strong durable goods and a bounce back in consumer sentiment. Only the Nasdaq finished slightly up 1.2% for the week. The Dow and S&P finished down 1.09% and 0.23%, respectively.

Next Week: The markets will await earnings from big energy companies, Chevron, Exxon Mobil, and Chesapeake Energy. Other key earnings reports will include Verizon, Colgate-Palmolive, Disney, Comcast, and Amgen. Economic events to look for are GDP, Employment, Construction Spending, and the ISM Manufacturing Index.

M&A, Deals, Corp Actions:

  • Solar cell equipment supplier, GT Solar International took a heavy beating on its initial market debut, with shares dropping ~24% from its open price of $16.50/share on Thursday. Other solar companies that went public in the past year, such as Renesola offered on 1/28 and Real Goods Solar on 5/07 have fallen steeply, as much as 15.9% and 1.9%, respectively month to date.

  • Sirius Satellite Radio and XM Satellite edged closer to deal approval from the Federal Communications Commission (FCC) on Wednesday, with majority of the commissioners voting for an acquisition. Both shares of SIRI and XMSR climbed 5.6% and 18.8% respectively for the week.

  • Brocade Communications agreed to purchase the internet traffic router and switcher- Foundry Networks for $2.91 billion to increase its product line and create a competitive advantage over networking behemoth Cisco Systems . Foundry’s stock jumped 32.3% for the week, while Brocade sank 19.4%.

  • General Electric and Abu Dhabi’s investment agency Mubadala Development publicized Tuesday a joint venture for $8 billion that will focus on providing commercial financial services to the Middle East. The two companies also aim to take initiatives in clean energy, aviation, and oil & gas sector. GE’s shares advanced 3.8% for the week on new business enterprise.

  • Swiss drug maker Roche Holdings offered a full acquisition of U.S. biotech company Genentech for $43.7 billion. Roche expects the combined entity to yield higher exposure to the cancer drug market. DNA shares rose 17.3% for the week on Roche’s offering.

  • The Nasdaq OMX Group officially acquired the Philadelphia Stock Exchange, the oldest exchange in the US, founded in 1970, and was renamed to NASDAQ OMX PHLX. The acquisition will expand NASDAQ's presence in the derivatives market, as it will operate as the third largest options market in the US. Nasdaq OMX moved higher 4.91% on final deal news

Other Market Moving News:

  • Government Sponsored Enterprises (GSE’s) Freddie Mac and Fannie Mae were the topic of a debatable bail-out by Congress which includes a $300 billion program to refinance troubled mortgages with federal insurance. The initial enthusiasm behind the government plan appeared to wear off, as shares of both FRE and FNM fell by 9.9% and 13.8% for the week.
  • Financial stocks continued to rally until the Existing Home Sales numbers hit on Thursday morning and dragged down the S&P 500 Financials Index by -6.7%, exacerbated when Gimme Credit LLC reported that investors were cutting exposure in Washington Mutual . The S&P 500 Financials experienced their worst one-day drop since 4/14/2000. Additionally, WaMu’s shares tumbled 35.1% for the week on battered 2Q earnings results.


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  • Crude Oil for September delivery, the new front-month contract, is now down $24.01 from its record peak of $147.27/barrel reached on 7/11, after fear over hurricane Dolly and production disruption in the Gulf of Mexico faded. Also, a buildup in gasoline inventories of 2.8 million barrel for week 7/18 or a 6% year/year increase as per EIA, raised demand concerns, resulting in crude declining by 4.8% for the week, and settled at $123.26/barrel.

  • Natural Gas for August delivery settled on Friday at $9.084/million BTU’s, the lowest close since 4/4, and is the worst energy performer for the week, shedding 14.06%. Natural gas dropped on the EIA’s larger-than expected inventories of 84 Bcf for the week of 7/18 and a milder weather forecast from the National Weather Services, which denoted cooler than normal temperatures for the eastern US region for the period 7/29-8/2, adding downward pressure on gas prices.

  • Pork bellies for August delivery trading on the Chicago Mercantile Exchange were on the rise this week or up 17.05%, as higher grain prices have worked their way into the price of meats.
    **Per the U.S Department of Agriculture Department, 2009 will see an increment in food prices by 4% to 5% for the year, led by red meat and poultry. Beef is estimated to rise by 6.5%, while pork and poultry can climb by 5.5%.

Currencies: The US dollar strengthened against the Japanese yen on Friday, helped by stronger than expected economic data. A rebound from a 28-year low in consumer sentiment, better-than-expected durable goods data, and a modest jump in existing home sales last month gave a boost to the greenback. A drop in crude oil prices to its lowest level since early June to ~$123 per barrel also helped to lift the US dollar.

  • The dollar index hit an intraday high of 72.93 on Friday, slightly below its highest level since early July, up 0.93% for the week.
  • The euro hit an intraday low of $1.5630 versus the greenback on Thursday, falling to its lowest level since July 7, after German business sentiment data showed its biggest drop since September 2001, according to Thompson Reuters. Friday afternoon, the euro traded at $1.5693 per euro, from $1.5672 late Thursday.
  • The pound sterling fell 0.44% for the week against the US dollar, as some economists expect the Bank of England to leave interest rates unchanged at 5%, following a second-quarter GDP report which came in slightly below expectations at 0.2%, from an estimated 0.3%. The pound sterling traded at $1.9905 per pound on Friday, from $1.9862 late Thursday.
  • Against the yen, the US dollar strengthened 0.54% on Friday to 107.88 yen, from 106.72 late Thursday, while the dollar traded at 1.0367 Swiss francs, from 1.0365 late Thursday, up 1.38% for the week.
  • Highlights: Russia - The Russian ruble has appreciated 4.80% year-to-date versus the US dollar. As inflationary pressure grows in Russia, interest rates have advanced this year from 10% in January to 11% in June. Russia's inflation rate has steadily increased from 12.60% in January to 15.10% in June, according to Trading Economics data.

Market Stats:

  • DOW
    • The Dow ended down -125.88 or -1.09% for the week
    • Friday, the Dow closed at 11,370.69, up 21.41 or 0.19%
    • The Dow is Negative YTD down -14.28%
    • The Dow is off by -2,793.84 or -19.72% from the market peak on October 9th of 14,164.53
    • The NASDAQ ended up 27.75 or 1.22% for the week
    • Friday, the NASDAQ Composite closed at 2,310.53, up 30.42 or 1.33%
    • The NASDAQ is Negative YTD down -12.89%
    • The NASDAQ is off by -548.59 or -19.19% from the market peak on October 31 of 2,859.12
  • S&P 500
    • The S&P 500 ended down -2.92 or -0.23% for the week
    • Friday the S&P 500 closed at 1,257.76, up 5.22 or 0.42%
    • The S&P is Negative YTD -14.34% down
    • The S&P is off by -307.39 or -19.64% from the market peak on October 9th of 1,565.15

S&P Sector Performance for the week ending Friday, July 25, 2008:
S&P 500 Industrials Sector (.GSPI) Up 4.19 or 1.38%
S&P 500 Health Care Sector (.GSPHC) Up 4.60 or 1.25%
S&P 500 Consumer Staples Sector (.GSPS) Up 2.04 or 0.73%
S&P 500 Information Technology Sector (.GSPT) Up 0.71 or 0.20%
S&P 500 Financials Sector (.GSPF) Down -0.55 or -0.20%
S&P 500 Consumer Discretionary Sector (.GSPD) Down -0.95 or -0.42%
S&P 500 Materials Sector (.GSPM) Down -2.62 or -1.07%
S&P 500 Telecomm Services Sector (.GSPTS) Down -2.26 or -1.72%
S&P 500 Utilities Sector (.GSPU) Down -4.95 or -2.52%
S&P 500 Energy Sector (.GSPE) Down -15.95 or -2.78%

S&P Top 10 Performers for the week ending Friday, July 25, 2008:
Bank Of America Corp (BAC) Up 7.91 or 36.50%
Wachovia Corp (WB) Up 2.96 or 25.65%
MBIA Inc (MBI) Up 0.97 or 24.87%
RadioShack Corp (RSH) Up 2.84 or 21.16%
QUALCOMM Inc (QCOM) Up 9.26 or 20.49%
General Motors Corp (GM) Up 1.98 or 19.96%
JPMorgan Chase and Co (JPM) Up 6.36 or 19.18%
Autonation Inc (AN) Up 1.50 or 18.18%
Lehman Brothers Holdings Inc (LEH) Up 2.62 or 18.16%
American International Group Inc (AIG) Up 4.16 or 18.02%

S&P 10 Worst Performers for the week ending Friday, July 25, 2008:
Washington Mutual Inc (WM) Down -2.08 or -35.14%
SanDisk Corp (SNDK) Down -3.91 or -22.25%
Broadcom Corporation (BRCM) Down -5.42 or -18.83%
Texas Instruments Inc (TXN) Down -4.82 or -16.72%
Expeditors International Washington (EXPD) Down -7.07 or -15.99%
Allegheny Technologies Inc (ATI) Down -8.54 or -15.81%
ETrade Financial Corp (ETFC) Down -0.57 or -15.57%
UNISYS Corp (UIS) Down -0.62 or -15.20%
Convergys Corp (CVG) Down -1.95 or -14.08%
Discover Financial Services (DFS) Down -2.28 or -13.96%

Dow Top Performers for the week ending Friday, July 25, 2008:
Bank Of America Corp (BAC) Up 7.91 or 36.50%
General Motors Corp (GM) Up 1.98 or 19.96%
JPMorgan Chase and Co (JPM) Up 6.36 or 19.18%
American International Group Inc (AIG) Up 4.16 or 18.02%
Citigroup Inc (C) Up 2.66 or 16.43%
Home Depot Inc (HD) Up 2.22 or 10.29%
United Technologies Corp (UTX) Up 4.54 or 7.48%
Intel Corp (INTC) Up 1.37 or 6.64%
The Walt Disney Co (DIS) Up 1.90 or 6.51%
Pfizer Inc (PFE) Up 1.08 or 6.06%

Dow Worst Performers for the week ending Friday, July 25, 2008:
Merck & Co Inc (MRK) Down -4.07 or -11.07%
Chevron Corp (CVX) Down -9.69 or -10.50%
ALCOA Inc (AA) Down -2.83 or -8.17%
American Express Co (AXP) Down -2.59 or -6.61%
Exxon Mobil Corp (XOM) Down -3.78 or -4.42%
AT&T Inc (T) Down -1.18 or -3.62%
Verizon Communications (VZ) Down -0.47 or -1.35%
The Boeing Co (BA) Up 0.55 or 0.87%
Wal-Mart Stores Inc (WMT) Up 0.54 or 0.96%
Caterpillar Inc (CAT) Up 0.67 or 0.96%

Key Earnings next week:
Monday: Kraft Foods (KFT), Verizon (VZ), Amgen (AMGN), WM Wrigley (WWY)
Tuesday: Colgate-Palmolive (CL), MetLife (MET), BP PLC (BP)
Wednesday: Disney (DIS), Comcast (CMCSA), Garmin (GRMN), Starbucks (SBUX)
Thursday: Exxon Mobil (XOM), Aetna (AET), MasterCard (MA), Expedia (EXPE)
Friday: Chevron (CVX), Sun Microsystems (JAVA), CIGNA (CI)

Economic Data next week:
Tuesday: Consumer Confidence
Wednesday: ADP Employment, Crude Inventories (weekly)
Thursday: Gross Domestic Product (GDP), Farm Prices, Jobless Claims (weekly)
Friday: Employment Situation, Construction Spending, ISM Manufacturing Index