Monday
Investors sought bargains following last week’s sell-off and that helped push the equity markets into positive territory on Monday. In corporate news, Monster Worldwide (MNST) rose after the company reported second quarter EPS of $0.32 versus estimates of $0.34. For the day, the DJIA gained 0.70% and the NASDAQ gained 0.82%.
Tuesday
Stocks finished in negative territory on Tuesday amid further credit concerns. In economic news, July’s Consumer Confidence survey rose to 112.6 versus the Street estimate of 105.0. June’s construction spending slid 0.3% versus the expected 0.2%. In corporate news, American Home Mortgage (AHM) fell 90% after the company said it is no longer able to borrow money to fund its lending obligations. Anadarko Petroleum (APC) rose after second quarter earnings came in above expectations. The DJIA and NASDAQ fell 1.10% and 1.43% respectively.
Wednesday
Stocks rallied late in the day Wednesday as credit concerns, rising oil prices, and better-than-expected economic news weighed on investors. The July reading on ISM Manufacturing fell to 53.8, better than the expected 55.0. In corporate news, Dow Jones (DJ) agreed to be taken over by News Corp. (NWS) for $60 per share. For the day, the Dow added 1.14% and the NASDAQ rose 0.30%.
Thursday
Strong quarterly earnings helped push equities into positive territory again on Thursday. In economic news, initial jobless claims for the week ended July 28 rose to 307,000, below the estimated 310,000. In corporate news, Shares of American Tower (AMT) and Disney (DIS) both rose after posting better-than-expected quarterly earnings. Mattell Inc (MAT) fell after the company stated it is recalling 1.5 million Fisher-Price toys. The DJIA gained 0.76% and the NASDAQ added 0.87%.
Friday
Continued weakness in the financial sector brought on by more negative news from Bear Stearns (BSC) helped stocks resume their sell-off on Friday. Credit rating agency Standard & Poor’s lowered Bear Stearns debt rating to “negative” from “stable” in the wake of its recent hedge fund woes. Consumer products maker Procter & Gamble Co (PG) reported its profits for fiscal fourth quarter had risen 19%, boosted by strong sales o new Gillette razors. The DJIA lost 2.09% and NASDAQ lost 2.51%.
Summary
The major averages suffered their third straight weekly decline thanks to a significant and broad-based sell-off on Friday. Concerns about the deteriorating credit market and the health of the economy weighed heavily on sentiment. Investors have been concerned that problems in the sub-prime mortgage market and the housing sector could curb economic growth and weigh further on US equities. For the week: the DJIA, S&P 500, and NASDAQ lost 0.63%, 1.79%, and 1.99% respectively.
