Monday
Oil started the week by jumping to a nine-month high, putting downward pressure on the equity markets. Fast-foot chain
Wendy’s (WEN) said it exploring a possible sale of the company while also cutting 2007 earning forecasts.
Apple (AAPL) rose after the company said its new Apple iPhone will have a longer battery life than originally anticipated. For the day the
DJIA lost 0.20% and the NASDAQ remained unchanged.
Tuesday
The equity markets rose slightly Tuesday on lower Treasury yields and mixed housing data. In economic news,
housing starts for May fell 2.1% to 1.474 million and May building permits rose 3.0% to a 1.501 rate, both higher than street expectations. Shares of
Bristol-Myers Squibb (BMY) rose after the FDA granted priority review for its experimental breast cancer drug ixabepilone.
Yahoo! (YHOO) announced that CEO Terry Semel would resign and be replaced by co-founder Jerry Yang. For the day, the
DJIA gained 0.16% and the NASDAQ gained 0.01%.
Wednesday
Rising treasury yields and oil prices caused the markets to fall on Wednesday. Brokerage firm
Morgan Stanley (MS) fell despite posting better-than-expected quarterly results.
Bear Stearns (BSC) also fell after Merrill Lynch (MER) seized approximately $800 million of bonds held by its losing hedge fund which has been hurt by turmoil in the subprime mortgage market. For the day, the
DJIA lost 1.07% and the NASDAQ fell 1.02%.
Thursday
Lower oil prices helped the markets rise on Thursday along with a better-than-expected report from the manufacturing sector.
Leading indicators for May rose 0.3% versus expectations of 0.2%. Weekly jobless claims rose by 10,000 to 324,000. In corporate news,
Starbucks (SBUX) fell after the CFO warned difficult market conditions and higher dairy costs will likely cause the company to miss the high end of fiscal 2007 earnings expectations. For the day, the
DJIA gained 0.42% and the NASDAQ rose 0.65%.
The week closed with an accelerated sell-off despite the largest public offering in five years by
Blackstone Group (BX). NYSE Euronext (NYX) submitted a bid for Italian stock exchange Bosra Italiana in an attempt to beat out the London Stock Exchange. Clothing retailer
Limited Brands (LTD) announced plans to increase its share buyback program and to lay off 10% of its staff at the corporate level. The
DJIA and NASDAQ lost 1.37% and 1.07% respectively.
Summary
Concerns about inflation, weak earnings reports, and oil prices hampered the equity markets despite anticipation of Blackstone Group’s initial public offering. The lingering effects of Bear Stearns hedge fund struggles and the impact on the broader market is cause for further concern.
For the week: The Dow lost 2.05%, the NASDAQ lost 1.44%, and the S&P 500 lost 1.98%.
