The Week In Review
8/22-8/26/11August 26, 2011
U.S. stocks opened modestly lower on Friday as Wall Street waited for Federal Reserve Chairman Ben Bernanke's speech on the economy. The Dow Jones Industrial Average declined 66 points to 11,083. The Standard & Poor's 500 Index fell 5 points to 1,154. The Nasdaq Composite Index dropped 2 points to 2,417. A few earnings being reported, but for the most part, the news wires are quiet ahead of the Fed's comments. On the earnings front Krispy Kreme, Pandora Media, Aruba Networks, and Tiffanys are trading higher following earnings. The retail sector in general continues to perform well even as more and more investors seem convinced a recession is possible. The recent rally in the financials has fizzled out. Even Bank of America has succumbed to profit-taking as investors reassess the Warren Buffett investment. Sallie Mae was upgraded, but the stock is down 3%. The insurance stocks are weak ahead of Hurricane Irene. Hartford is down 2% even though the analyst admitted the stock is trading for just 6 times earnings. Tough market. The commodities are trading lower for the most part. Noble and Weatherford were upgraded, but only Noble is higher. At 10 o'clock, the Fed's speech provided no new policy initiatives which most investors conceded would be the outcome. The averages sold off with the Dow dropping 200 points and the Nasdaq declining 30 points. Luckily, the selling did dry up. After the first hour of trading, the averages rebounded led by the techs. Microsoft, Google, Apple, Intel, Cisco, and Research in Motion all look good. A number of commodities have also rebounded. Noble Corp is trading up 3%. After the first hour the Nasdaq rose 15 points while the Dow pared half its' losses. Through the morning the Nasdaq kept improving dragging the Dow back to the unchanged level. The techs remain in the lead with the chips sporting the biggest gains. In the afternoon the averages kept pushing higher. I don't know where this rally came from, but I'm not complaining. The financials and insurance stocks are two sectors not participating much in the rally. In the last hour the averages pulled back only to rebound into the close. The Dow Jones Industrial Average rose 134 points, or 1.2%, to 11,284, up 4.3% from last Friday's close. The Standard & Poor's 500 Index rose 17 points, or 1.5%, to 1,176.80, for a weekly rise of 4.7%. The Nasdaq Composite Index rose 60 points, or 2.5%, to 2,479, leaving it with a 5.9% weekly gain.
August 25, 2011
The major averages got a shot in the arm thanks to Warren Buffett's company Berkshire Hathaway deciding to invest $5 billion in Bank of America. The Dow Jones Industrial Average rose 69 points to 11,390. The Standard & Poor's 500 Index climbed 8 points to 1,185. The Nasdaq Composite Index advanced 8 points to 2,475. Bank of the America is leading the charge for a second straight day, up 20% thanks to Warren Buffett giving the bank the seal of approval. All the financials are higher. JP Morgan, Wells Fargo, Goldman Sachs, and US Bancorp are all up 4%. The insurance stocks are also trading higher even though Hurricane Irene is bearing down on the east coast. MetLife was downgraded, but the stock is higher by 2%. In the tech space, a sad day for Apple as Steve Jobs officially steps down as CEO. The stock is down a percent. Applied Materials is down 2% following earnings. IBM and F5 Networks are higher on upgrades. AMD is up 5% after announcing a new CEO. The commodities look good this morning even though the margin requirements for gold were raised once again. In the retail space Hormel Foods, Guess, and Brown Shoe are lower on downgrades. Sanderson Farms is up 3% even though they missed estimates. Big Lots, Toro, and Diageo are higher on earnings. After the first half an hour the averages sold off. The financials remain strong, but everything else has sold off. Through the morning and into the lunch hour the selling accelerated. Even the financials went into the red led by the insurance stocks. Ugly market. By 1 o'clock, the Nasdaq fell 50 points and the Dow dropped 180 points. The only Dow component trading higher is Bank of America. In the last hour the averages tried to rally only to give up its' gains into the close. The Dow Jones Industrial Average finished down 170 points, or 1.5%, at 11,149. The Standard & Poor's 500 Index shed 18 points, or 1.6%, to 1,159. The Nasdaq Composite Index declined 48 points, or 2%, to 2,419.
August 24, 2011
U.S. stocks opened modestly lower Wednesday after the previous session's sharp rise, with losses curbed by a bigger-than-expected rise in orders for U.S. durable goods in July. The Dow Jones Industrial Average declined 19 points to 11,157. The Standard & Poor's 500 Index fell a point to 1,160. The Nasdaq Composite Index declined 2 points to 2,443. The first few minutes of trading looked precarious until the buyers kicked in purchasing the financials of all things. Bank of America is jumping 8% following an upgrade at Raymond James. All the financials look good for once. A recent IPO, LPL is one of the few financials lower on a downgrade. A number of commodities are also trading higher. Nucor is up 2.5% on an upgrade. The fertilizers also look good. Trina Solar is lower on a downgrade. Newmont Mining was upgraded, but the stock is down by 3%. In the tech sector, Google is higher thanks to an upgrade and news of a settlement with the government. Computer Science is up 2% after also settling a claim with the government. Apple is higher as well, but most of the other techs are not participating. In the first hour, the Dow rose as much as 90 points thanks to the financials. The Nasdaq inched up 13 points. After the first hour, however, the averages had given up half their gains. The financials are still in the lead. On the earnings front, Pacific Sunwear and American Eagle look awful following disappointing guidance. Saks is up 5% on an upgrade. La-Z-Boy is modestly higher following earnings. Through the morning the Nasdaq fell into the red while the Dow held on to modest gains thanks to the financials. In the afternoon the averages reaccelerated led by the financials. In the last hour the rally pushed higher with the Dow rising over 100 points. I hope Fed Chairman Ben Bernanke has something good to say on Friday. The Dow Jones Industrial Average finished up 143 points, or 1.3%, at 11,320. The Standard & Poor's 500 Index gained 15 points, or 1.3%, to 1,177. The Nasdaq Composite Index advanced 21 points to 2,467.
August 23, 2011
U.S. stocks began modestly higher on Tuesday, extending gains into a second day, as reports on manufacturing in Europe and China lifted sentiment. The Dow Jones Industrial Average rose 40 points to 10,895. The Standard & Poor's 500 Index climbed 3 points to 1,127. The Nasdaq Composite Index gained 13 points to 2,359. The news is light this morning as most investors and analysts are paralyzed, not knowing what to do. On the earnings front, Heinz and William Sonoma are both down over 3% following disappointing earnings. However, Medtronic, Trina Solar, and Bank of Montreal look good following earnings. The banks look good for once, but the rally didn't last. Similar to yesterday, the sellers came in shortly after the open, putting a damper on the rally. Bank of America looks awful, down 6% to new lows. The rest of the financials followed suit. Goldman Sachs is down once again on rumors the CEO has hired a high profile lawyer for possible lawsuits from the Justice Department. Not a lot of good news in the financial arena. The techs are acting a little better. AOL, Apple, Juniper Networks, Google, and Ebay are all higher on upgrades. Microsoft, Oracle, Red Hat, and Akamai had their price targets lowered at Stifel, but the stocks are higher. The commodities are also trading higher. Noble Energy is higher on an upgrade. After the first half an hour, in line manufacturing data and housing numbers sent the averages higher. The Dow, after giving up most of its gains is now up over 100 points. The Nasdaq is up 30 points. Even the financials rebounded into the green, but not by much. Aetna is up 2% on an upgrade, but the rest of the insurance stocks are struggling. Hartford made a new 52 week low this morning. Bank of America, remains in the red. Not a good sign. Through the morning the averages remained in the green, but there is not much conviction to this market. Once the European markets closed, our averages crept up to new highs for the day. In the afternoon the averages got an added boost from Bank of America firing back at an analyst that predicted B of A would have to raise at least $100 billion. In the middle of the afternoon the averages dipped on news of an earthquake in Virginia. A number of financials are selling off pretty good including Bank of America, Goldman Sachs, and Hartford. All three are down 2% or more. After a mid afternoon sell off, the averages rebounded in the last hour. On the surface, it was a good day. The Dow Jones Industrial Average finished up 322 points, or 3%, at 11,176. The Standard & Poor's 500 Index added 38 points, or 3.4%, to 1,162. The Nasdaq Composite Index advanced 100 points, or 4.3%, to 2,446.
August 22, 2011
U.S. stocks opened higher Monday after four weeks of declines. "After a sharp fall in stocks and rally in Treasuries at the end of last week, investors this week will try to assess whether the outlook for the economy is quite as dire as the markets seem to suggest," said David Kelly, chief market strategist at J.P. Morgan Funds. The Dow Jones Industrial Average rose 190 points to 11,008. The Standard & Poor's 500 Index climbed 21 points to 1,145. The Nasdaq Composite Index gained 50 points to 2,392. The economy is getting weaker, but the retail sector seems to be holding up. The number two U.S. home-improvement retailer Lowe's looks good. Lowe's shares are up 2.5% after announcing a $5 billion share repurchase program. Another recent dog, Hewlett-Packard is up 6% on an analyst upgrade. HP closed yesterday at a six year low. Athletic-gear maker Under Armour looks good jumping 6.5% on an upgrade to buy from hold by Capstone Investments. Everything looked good for about half an hour, but the rally fizzled. Crude-oil is under pressure on the heels of an apparent regime change in Libya. Gold, however, is not having the same problem. Gold keeps pushing higher, inching closer to 1900 an ounce. Through the morning the averages stabilized, rallying into the afternoon, but there is not much conviction to the buying. The financials once again are not participating. Bank of America is lower once again on constant concerns of a lack of reserves to weather another economic downturn. In the afternoon the averages held up until the last hour when the sellers showed up once again. "The stock market is screaming to Ben Bernanke at the top of its lungs for a QE3," said Keith Springer, president of Springer Financial Advisors. "If we get it, we'll have a nice rally. If we don't, we'll have a bloodbath." The Dow Jones Industrial Average finished up 37 points at 10,854. The S&P 500 added 29 cents to 1,123. The Nasdaq Composite finished up 3 points at 2,345, finishing higher for the first time in five sessions.