US equity markets posted another week of gains despite losing some steam today as corporate earnings (outside of financials and homebuilders) and economic data continue to point more toward a shallow recession than an economic meltdown.
Wall Street ended the week lower despite better-than-expected economic data after Microsoft walked away from its heavily hyped attempt to takeover Yahoo and crude prices continued to climb.
May started off on a positive note: All three major indexes extended gains for the week after much anticipated economic data wasn’t as negative as many expected. The Dow Jones Industrial Average climbed 1.3 percent and the S&P 500 gained 1.1 percent for the week, though the tech-heavy Nasdaq Composite came out the big winner with a weekly gain of 2.2 percent.
The market closed in a mixed bag today but couldn’t gain enough for an end-of-the-week rally. American Express bolstered the Blue Chips with a 3.2 percent rise in its stock following a less-than-anticipated profit drop during the first quarter. All three of the major indexes posted gains for the week. The Dow Jones Industrial Average climbed 0.4 percent; the S&P 500 swelled 0.5 percent; and the Nasdaq Composite rose 0.8 percent.
When faced with the dilemma of making the mortgage payment or putting food on the table, well-adjusted people sometimes make rash decisions, like pawning Grandma’s engagement ring or holding up a convenience store.
Stocks posted a solid rally as this week’s bad news just wasn’t bad enough to bring the markets down further. Despite a $5.1 billion loss for the quarter, Citigroup shareholders rewarded the company by sending shares up by as much as 7 percent around midday, given that the losses weren’t as bad as expected. Investors were also buoyed by solid reports from Caterpillar, which reported 13 percent higher first quarter profits on strong international sales. The S&P 500 and Dow Jones Industrial Average both gained 4.3 percent for the week, and the Nasdaq Composite jumped 4.9 percent.
The markets have been easing downward again, giving up much of last weeks gains, following troubles at market bellwethers Alcoa and GE. The former blamed its 54 percent decline in net income on higher energy costs and the weaker dollar, with the latter’s woes due to troubles at its financial unit despite solid performance on the industrial side of its operations.
Many companies have found themselves in trouble during the recent bear market–some trouble totally unexpected, some hinted at. But those hints are usually about as clear as mud because companies don’t want to hype bad news, and you can’t always count on the media to get the story correct.
Perhaps it’s because spring’s in the air, or maybe the negativity finally hit rock bottom. Regardless of the impetus, investor sentiment seems to be turning a corner. Despite a mixed bag of economic news, there was enough positive trickle to send all three of the major US indexes significantly up for the week. The S&P 500 ended the week up 4.2 percent, the Dow Jones Industrial Average gained 3.2 percent and the Nasdaq Composite rose 4.9 percent.
It’s been a mixed week of news on both the corporate and economic front. The best news this week is that the final fourth quarter GDP number remained unchanged, up 0.6 percent. Early on, the markets edged up before gradually trending down on Wednesday.
