YAHOO [BRIEFING.COM]: Renewed
weakness on Friday left stocks to finish the week on a down note, contributing
to the market's worst weekly performance in more than a month. As has been the
case all week, participants paid close attention to the events of Europe.
Greece drove trade for
virtually the entire week and, by extension, was responsible for most of the
market's volatility. During the course of this week's first two sessions stocks
sank more than 5% as participants reacted to news that Greece wanted to pursue
a referendum of the eurozone bailout, effectively threatening to undermine the
efficiency with which the plan could be completed and implemented. Stocks
spiked in the next two sessions as sentiment improved amid reports that
officials put pressure on Greece to acquiesce to the agenda of other eurozone
members by abandoning its plans for a referendum. Although the drama didn't
exactly rival a Greek tragedy, it still made for interesting theatre.
By Friday, stocks were unable
to build on the gains achieved in the past two sessions. Buying was partly
diffused by news that discourse during a G-20 meeting became less than
amicable. That seemed to suggest that, despite recent efforts, an agreement on
how to handle Greece and precarious conditions in the rest of Europe remain
elusive.
Market participants were also
uninspired by news that unemployment eased down to 9.0% from 9.1%, which is
where it had been expected to remain. Nonfarm payrolls for October totaled
80,000, which is slightly less than the tally of 85,000 that had been expected,
on average, among economists polled by Briefing.com. Nonfarm private payrolls
increased by 104,000, which is less than the consensus call for an increase of
117,000, but on par with the ADP Employment Change that was reported this past
Wednesday. The latest weekly initial jobless claims count of 397,000 was not
included in calculations, though it is worth noting that that tally marked the
first time in a month that initial claims slipped below 400,000.
In all, the employment levels
proved on par with weak-to-moderate economic growth. With that in mind, the Fed
announced mid-week that it raised its long-run umemployment rate forecast to
5.6% from 5.4%. The Fed also cut its growth forecast for fiscal 2011 to the
range 1.6% to 1.7% from the range 2.7% to 2.9%. For 2012, growth is expected
the range from 2.5% to 2.9%, down from a range of 3.3% to 3.7% that had been
previously projected.
In its most recent policy
statement, the FOMC kept its target interest rate at 0.00% to 0.25%. It also
stated that the Fed remains prepared to employ its tools to promote a stronger
economic recovery and that it will continue to extend the average maturity of
its securities holdings. At the European Central Bank's latest meeting, members
decided to become more accommodative by trimming the key lending rate by 25
basis points to 1.25%.
Other data this week featured
the October ISM Manufacturing Index, which declined to 50.8 from 51.6 in the
prior month. It had been expected to improve to 52.1. As for the ISM Services
Index, it came in at 52.9, which is less than the 53.9 that had been broadly
expected.
Given the market's fixation on
macro-related headlines, earnings were given secondary concern. Overall,
results this week were generally better-than-expected. Pfizer (PFE 56.50, +0.39), Kraft (KFT 35.18, -0.60), MasterCard (MA 360.09, -6.50), and Qualcomm (QCOM 56.50, +0.39) were among the more
major names that reported -- each exceeded what Wall Street had expected. Comcast (CMCSA 22.75, -0.57), ArcelorMittal (MT 20.31, -0.29), Kellogg (K 49.91, +0.00) and Marsh & McLennan (MMC 30.58, -0.19) were among the more
widely held names that came short of the consensus estimate.
With earnings mattering little
to market participants this week, stocks slid to a 2.5% weekly loss. That
snapped four straight weeks of gains.
Trade was generally mixed
among commodities today. That kept the CRB Commodity Index close to the neutral
line all session.
Among the CRB's primary
components, oil prices made an incremental advance to $94.43 per barrel.
Natural gas prices settled only a penny higher at $3.90 per MMBtu.
As for precious metals, gold
prices suffered a 0.6% loss by closing at $1755.60 per ounce.
Amid the market's weakness,
the dollar attracted buyers. For the week it climbed about 2.5% against a
basket of major foreign currencies. Most of its strength came earlier in the
week, when participants had dumped the euro amid all of the headlines out of
the eurozone. The yen also slumped earlier this week. Its dive came after
Japan's officials intervened in the currency in an effort to curb its strength.
Just last week the yen set a post-WWII record high. DJ30 -61.23 NASDAQ -11.82
NQ100 -0.5% R2K -0.7% SP400 +0.1% SP500 -7.92 NASDAQ Adv/Vol/Dec 903/1.93
bln/1586 NYSE Adv/Vol/Dec 1160/855 mln/1798