Hanover Advisors, Inc.

Dow Ends Three Week Streak

2012-01-28T13:08:00.002-05:00

A weaker than anticipated economic growth report sent the Dow lower on Friday and ended what had been a three week long winning streak. While the Dow ended the week down nearly 0.5%, the S&P 500 and the Nasdaq finished the week with gains.

Friday's slump was centered on the first reading of the fourth quarter 2011 GDP. Wall Street was looking for a GDP which would show the U.S. economy grew at a rate of 3.2% in the last quarter of 2011. Friday's report showed the economy grew at an annual rate of only 2.8%. Besides the lower than expected reading, many analysts were quick to note that much of the growth came in increased inventory which investors see as just a temporary boost to the GDP and not sustainable going forward.

In addition to the weak economic growth, the ongoing European debt crisis raised the anxiety level of investors late in the week. Fitch rating agency downgraded the credit ratings of five European nations, including Spain and Italy. Also, there is a growing angst among investors that the latest bailout deal for Greece is in jeopardy of coming apart. Negotiations with private international investors and the Greek government are turning sour and could threaten Greece's ability to arrive at an agreement to meet a 14 billion euro debt payment due on March 20th.

The combination of lackluster economic data, the euro zone debt crisis, and a week of mixed earnings reports from corporate America has left investors feeling cautious.

Economic data and events in Europe will continue to drive the market in coming weeks. Wall Street doesn't like uncertainty, and until investors have a better sense of where the global economy is heading, we will most likely continue to experience a choppy market.

Crude oil prices continue to test the $100 a barrel price level. Oil finished the week at $99.56 a barrel.

Gold prices have been moving upward, with the precious metal closing the week at $1,732.20 an ounce.

Stocks Post Strong Gains

2012-01-21T12:59:00.002-05:00

Strong corporate earning reports and better than expected economic news drove all three major indexes higher this past week. The Dow finished the week up 2.4%, the S&P 500 added 2%, and the Nasdaq climbed 2.8%. It was the third straight week of gains for all three indexes.

Solid quarterly earning reports, especially in the financial sector, had investors feeling bullish. Also, the existing-home sales report on Friday added to the optimism. While a large portion of the home sales are due to investors and speculators buying up distressed sales ..... at this point with the depressed housing sector, we will take any type of buyers we can find. Regardless of the type of buyers stepping up to buy the glut of properties, the best news for everyone is that the inventory of homes for sale is beginning to shrink considerably.

The European debt crisis continues to be a drag on investor confidence. There is a growing fear that the deal on restructuring Greek debt may fall apart and result in Greece defaulting in a disorderly fashion. In a complicated deal, involving the ECB, the IMF, and private investors, there is an increasing prospect that the deal may unravel and end with the major parties unable to agree to the original terms of the bailout.

Crude oil prices retreated from their earlier highs in the week and settled at $98.11 a barrel on Friday.

Gold prices continue to inch higher, but still far off their highs of $1,800 an ounce. Gold finished the past week at $1,664.00 an ounce.

Choppy Week on Wall Street

2012-01-15T11:40:00.003-05:00

Despite Friday's downturn, stocks ended the week higher. The Dow gained nearly 0.5%, the S&P 500 ended the week up 0.9%, and the Nasdaq rose 1.4%. It was the second straight week markets finished with a gain.

A combination of downgrades for eurozone countries and poor fourth quarter earnings by JPMorgan Chase left investors feeling anxious. Earlier in the week, positive bond auctions by Italy and Spain lifted equity markets, but the downgrades issued by S&P on Friday reminded investors of just what a mess the euro debt crisis continues to be. The poor earnings coming out of JPMorgan Chase has many investors worried the entire financial sector may see poor fourth quarter earnings. This coming week will see earnings reported by nearly all the large bancks: Citi, Goldman, Wells Fargo, Morgan Stanley, and Bank of America. Look for these reports to have a large impact on overall market performance in the coming week.

The dollar continued to strengthen against the euro. The euro fell to a 17-month low against the dollar as international investors and currency traders are losing faith European leaders are anywhere near agreement on a long term solution to their debt crisis.

Gold ended the week at $1,630.80 an ounce and crude prices finished the week at $98.70 a barrel.

Stocks End Week Higher

2012-01-08T21:26:00.002-05:00

Stocks finished the week mostly higher on mixed economic news. While the December jobs report was better than expected, investors are still worried about government debt levels and banking problems in Europe. The Nasdaq gained 2.3% for the week, while the S&P 500 edged higher 1.1% and the Dow rose 0.6%.

The Labor Dept. reported the economy added 200,000 jobs in December, but investor reaction was muted by the data showing 40,000 to 50,000 jobs were seasonal workers holding positions which most likely will disappear in January. The improving data regarding the U.S. economy is being overshadowed with concerns about the faltering European economy. Italian and Spanish bond yields remain elevated and unsustainable. The euro continues to fall against the dollar and has hit new lows not seen in over 15 months. Also, Wall Street is awash with rumors that the credit agencies are on the brink of knocking down France's credit rating.

Investors are stymied by worries that European banks will be unable to raise capital. Shares of most European banks have been under increasing pressure, and investor confidence is faltering.

Crude oil prices continue to remain above the $100 a barrel range. Oil prices ended the trading day on Friday at $101.28 a barrel.

Gold prices climbed back into the $1,600 range and finished the trading week at $1,616.80.

Markets End 2011 Nearly Flat

2011-12-31T12:06:00.002-05:00

The three major indexes closed out 2011 at about the same point we began the year. The Dow finished the year up 5.5%, the Nasdaq lost 1.8%, and the S&P 500 finished virtually unchanged. In fact, the S&P recorded the smallest annual change in history, 0.04%.

In comparison to foreign markets, the U.S. equity markets had a very good year. European markets were down anywhere from 6% to over 15% depending on which market was measured, and most Asian markets lost nearly 20% in 2011.

The final trading week of 2011 saw extremely light volume and not a great deal of economic data. The euro zone remains in flux, with the latest Italian bond offering going so-so and economists worried that their 10 year bond yields remain at or above 7%. Chinese manufacturing continues to slow and analysts fret about the impact a slowing European economy will have on Chinese exports.

Crude oil prices ended the week at $98.63 a barrel. Oil prices were up over 8% in 2011, and it was the third consecutive year oil prices have climbed. Oil experts are keeping a close eye on the war of words coming out of Iran with their military exercises in the gulf. While no one expects a disruption of oil out of the gulf, all it takes is a rumor to upset global oil markets and a sudden spike in oil prices.

The price of gold continues to be volatile. Gold finished Friday's session at $1,566.80 an ounce. While coming down sharply from its $1,800 range, gold still finished the year up over 10%. 2011 marked the eleventh straight year that gold prices have climbed.

Glimmers of Hope for U.S. Economy Lift Markets

2011-12-25T12:54:00.002-05:00

A batch of positive economic data lifted investor's spirits just before the holidays. The Dow ended the week up 3.6%, while the S&P 500 added 3.7% and the Nasdaq finished Friday with a gain of 2.7%.

The overall data showed the U.S. economy, while still weak and fragile, is showing signs of stabilization. Housing numbers, personal spending, and income all reflected a slowly improving economy. There was also positive news out of Washington that a short-term deal had been reached on extending the payroll tax cut for two months.

The euro zone debt crisis shows signs of fraying, as Italian 10 year bond yields have once again moved into the danger zone of 7%. Seven percent is seen by most economists as the point that most sovereign debt can not be sustained even in the medium term. Both Ireland and Greece required bailouts once they passed the 7% rate. Despite the Italian bond issue, European markets closed higher on Friday.

Oil prices, while slipping earlier in the week, finished Friday's trading session near the $100.00 a barrel barrier at $99.81 a barrel.

Gold continued to come under pressure and flirted with falling below the $1,600.00 floor, but rebounded a bit and ended Friday at $1,606.00 an ounce.

We'd like to take this opportunity to wish all our clients a very Merry Christmas, Happy Holiday, and a Happy New Year.

Debt Worries sink Dow

2011-12-17T19:50:00.002-05:00

Both the S&P500 and the Dow finished the week down 2.8%, while the Nasdaq slid 3.4%. In a repeat of previous weeks, European worries once again sank equity markets. U.S. markets closed higher on a good jobs report and also positive news in the latest manufacturing numbers. Investors for most of the week looked past the improving economic conditions in the U.S. and focused instead on worries the rating agencies may downgrade France's AAA rating.

While the market began Friday with nearly a 1% gain, the gain was erased through the day on news Fitch downgraded seven banks (Goldman Sachs, Morgan Stanley, Credit Suisse, Deutsche bank, Barclays, BNP Paribas, and Societe Generale). Also driving down investor confidence was the news from Fed President Dudley that the deteriorating situation in Europe would reduce demand for U.S. products and be a job killer for the U.S.

Just as it has been true for the past couple months, markets will be driven by events in Europe again this coming week. With so many investors lacking conviction over the market's direction, volatility will remain high. Investors are so jittery about events in Europe that the market swings not only on news, but even reacts to rumors.

Gold prices were clobbered this past week. Gold prices on Friday closed at $1597.90, a loss of nearly $120 dollars an ounce for the week.

Crude oil prices also tumbled in the week just ending. Crude closed Friday at $93.99 a barrel, down $5.42 a barrel compared to the previous week.

Volatile Week Ends With Modest Gains

2011-12-11T13:01:00.002-05:00

The euro zone debt crisis once again added a great deal of volatility to global equity markets this past week. Stocks rallied on Friday with news European leaders had agreed on a new deal to resolve the crisis.

The new deal calls for the creation of an intergovernmental treaty to ensure the national budgets of euro zone nations are in compliance with fiscal treaty guidelines. As with all previous trumpeted plans out of the EU, the devil will be in the details. Many investors and analysts remain skeptical the new plan will be a cure all for long-term European woes.

Following the ups and downs of the week, the Dow ended up 1.4%, the S&P 500 edged 0.9% higher, and the Nasdaq added 0.8%. While all eyes were on Europe, the other economic news for the week was a mixed bag. Consumer sentiment climbed higher than expected, the U.S. trade deficit was a bit higher than the previous month, and the weekly jobs number was better than expected. Asian markets are growing anxious about China's economy. While the recent data indicates inflation in China has cooled, industrial production in November fell sharply.

European events will continue to dominate market moves. Unfortunately, regardless of what moves the EU purposes it will take some time to implement the changes. In the meantime, markets will remain volatile due to all the uncertainty.

Crude oil prices remain hovering around the $100.00 a barrel range. Oil prices closed Friday at $99.41 a barrel.

Gold finished the week at $1,716.40 an ounce.

Dow Enjoys Best Week In Years

2011-12-04T11:00:00.002-05:00

All three major indexes logged robust gains this past week. The Dow ended the week up 7%, the S&P 500 climbed 7.4%, and the Nasdaq rallied for a 7.6% gain. The Dow's performance was the best since July 2009.

Markets moved higher on Friday morning's unemployment number, but gave back all the day's gains as investors worried about the huge number of people that dropped out of the workforce in November. Markets also fretted about rumors the U.S. Senate would not support the latest European plan to involve the IMF even further in the euro zone debt crisis. There appears to be a lack of political support for any effort which would place the U.S. taxpayer exposed to financial losses stemming from Europe.

The European debt crisis continues to hang like a dark cloud over the global economy. The mix of economics, politics, and so many nations having to agree to some course of action, has left European leaders unable to take any real steps forward. A growing number of economists are beginning to openly voice the opinion that too little was done too late, and the euro can not survive in its current state. If the euro does experience some major blow up, it will be felt here in the U.S. and that is what has so many investors on edge.

European Woes Make For A Terrible Week

2011-11-26T14:08:00.002-05:00

Sovereign debt woes in Europe weighed down all three major indexes this past holiday week. The Dow finished a terrible week down 4.8%, while the S&P 500 slid 4.7% and the Nasdaq was off over 5%. It was the worst Thanksgiving week on Wall Street in decades.

Once again, global markets fell as European leaders continued to discuss possible solutions to the continent's growing debt crisis. Investors are beginning to lose confidence that the crisis will be solved before some huge blow up in global credit markets unfolds. This past week was marked by a shocking lackluster debt auction in Germany, Fitch knocking down Portugal's credit rating to junk status, Standard and Poor's knocking down Belgium's credit rating, and Italian 10 year bond yields rising to over 7%. That 7% yield level is seen as the breaking point before a nation may be required to ask the EU for a possible bailout. Ireland, Greece, and Portugal all asked for bailouts once their bond yields passed 7%.

Beyond the direct fallout in the EU, analysts fret we are beginning to see signs of a global slowdown due to weakness in the EU. The latest data shows manufacturing in China has slowed sharply, and U.S. corporations are reporting slumping sales in Europe.

Commodity prices are also reflecting a weakness in global demand. Gold prices have fallen into the $1600.00 dollar range. Gold finished the week at $1,685.70 an ounce. Crude oil prices, which had broken the $100.00 a barrel barrier, retreated to end the week at $96.12 a barrel.

The coming week will be a busy week of economic data. Most watched will be Friday's November jobs report, but all U.S. economic data will take a backseat to events in the euro zone. If the crisis continues, look for equities to be under tremendous pressure. Currently, all eyes are on Europe.

European Woes Equal Steep Decline On Wall Street

2011-11-19T14:01:00.003-05:00

Once again, the ongoing debt crisis in Europe is roiling global markets. U.S. stocks finished Friday with little change, but the market suffered sharp losses earlier in the week. The Dow ended the week down 2.9%, the S&P 500 lost 3.8%, and the Nasdaq was off almost 4%. It was the worst week in over two months for all three indexes.

The headline news out of Europe has shifted focus from Greece to the larger European economies such as Italy, Spain, and France. Yields on government bonds from all three nations have been rising sharply amid fears that the debt crisis is growing worse and there appears to be no viable political solution on the horizon. As if investors didn't already have enough to worry about, there is a growing concern that the super committee in Washington, and their inability to reach a deal on the U.S. debt agreement, will fail to arrive at a compromise.

This week's U.S. economic data was more positive than analysts had been expecting, but the global sovereign debt problems are currently overshadowing any good economic data. Improving domestic economic fundamentals matter little when all eyes are on Europe.

This coming week will probably bring more volatility to the markets. Events in the euro zone will continue to dominate global markets.

Crude oil prices, while spiking near $102 a barrel earlier in the week, retreated mildly and finished the week in the $97 price range.

Gold prices rallied a bit on Friday, but still lost over $50.00 an ounce through the week and ended the week at $1,725.10 an ounce.

Volatile Week on Wall Street

2011-11-12T13:23:00.002-05:00

Friday's rally moved the Dow and the S&P 500 into positive territory for the week, but despite Friday's upward move the Nasdaq finished the week in the red. As usual, the ongoing debt crisis in Europe was the cause of all the volatility throughout the week. As we mentioned last week, the debt crisis in Greece has now moved to Italy and investors are worried that if Italy defaulted it may spell the end of the euro.

Earlier in the week, Italian bond yields spiked to record highs above 7%. Yields came off those highs, but investors continue to worry about the global fallout of an Italian default. Italy is the world's eighth largest economy and is probably beyond the ability of the EU to bail it out. Analysts claim the gross debt level of Italy now stands near 1.9 trillion euros. Unfortunately, European watchers claim there is more volatility to come. What has economists most worried is that even if Italy and Greece enforce very strict austerity guidelines, growth in the euro zone is anemic at best and may actually be slipping into a recession. A deep or prolonged recession would blow a hole in the current budgets of all the weaker, struggling economies of Europe and make the debt crisis that much worse.

Gold prices were also volatile for the week. Gold rebounded on Friday and finished the session at $1,784.80 an ounce.

Oil prices continue to climb. Oil is flirting with nearly $100 a barrel price. Crude finished the week at $98.99 a barrel.

Greek Worries Pressure Market

2011-11-05T11:35:00.002-04:00

Once again, worries about events in Europe roiled global markets. U.S. stocks finished the week down nearly 2%. Global markets were shocked earlier in the week when the Greek Prime Minister announced he would put the latest agreed upon austerity plan to a vote of the Greek people. It is uncertain if the current Greek leadership can survive the economic crisis, and it is also open to question if the Greek nation itself will make the necessary steps to avert a default on its sovereign debt. Needless to say, all this uncertainty has investors deeply worried.

And as if there was not enough to worry about already with Greece, Italy is quickly becoming the focal point of worry as its massive debt level continues to increase. There are new worries that the Italian government may not survive, and that a bailout of Italy is beyond the financial limits of the EU.

On the domestic front, the October jobs report was either good news or poor news depending on what data was highlighted. There were enough jobs created in October to convince economists that the economy is probably not heading into another recession, but the number of new jobs is so low it is further proof that the economy is doing no better than just limping along. Analysts worry that a sizable share of the new jobs being created in the retail sector are just temporary seasonal work and many of these new workers will be let go after the holiday season.

Crude oil prices continue to inch higher. Oil ended the week at $94.26 a barrel.

Gold prices have enjoyed a rebound due to all the uncertainty in the global economy and have moved into the mid $1,700 range. Gold finished Friday's trading session at $1,756.00 an ounce.

Stocks Soar on Eurozone Debt Plan

2011-10-29T12:38:00.002-04:00

Stocks surged this week on headline news of a possible long-term solution to the European debt crisis. Stocks moved to a nearly 3 month high, and are on track for the best monthly performance in decades. The Dow is now up 12% for the month. The Nasdaq and S&P 500 have gained more than 13% in October. All three indexes are now in positive territory for the year.

Stocks were flat on Friday after Thursday's surge as investors digested some of the details in the latest euro zone debt plan. There is still a great deal of uncertainty about the effectiveness of the plan. Many of the details are sketchy, and many investors still doubt the plan will work. What does seem certain is the debt issue in Europe will continue to add a great deal of volatility to U.S. markets for months to come.

The latest economic news was one of good news/bad news. The good news was personal spending ticked up a bit in September, the bad news was that it came at the expense of Americans' savings. The saving rate for Americans in September was the lowest it has been since 2007.

The University of Michigan Consumer Survey for October came in slightly higher than analysts had been expected.

Gold prices ended the week at $1,747.20 an ounce.

Crude oil prices have been rising for the last couple weeks and have moved from just below the $80 mark to mid $90. Oil finished the week at $93.32 a barrel.

Possible European Solution Lifts Market

2011-10-23T11:58:00.002-04:00

Markets rallied during the week on hopes euro zone policymakers may be nearing a comprehensive proposal to deal with the European debt crisis. Along with the possible good news in Europe, investor optimism grew with a host of positive earnings reports. Overall, earnings were better than anticipated and appeared to ease some of the anxiety that the U.S. economy was heading into a double-dip recession.

This past week's gains moved the market to its highest levels since early August, and pushed the Dow back into positive territory for 2011.

European leaders will be meeting throughout this weekend in an attempt to hammer-out some type of overall framework for dealing with the debt crisis. Some skeptical investors doubt the meetings will generate a long-term solution to the root problem of the crisis and instead offer nothing more than a system to deal with the fallout of possible defaults. In brief, these skeptical investors seriously doubt this weekend will be an end to the crisis.

The danger for all investors is if this weekend doesn't produce some form of concrete plan to deal with the crisis, then markets will again retreat this coming week as the optimism fades. The European debt crisis is dominating global markets, and it will continue do so until the crisis comes to a head or a solution is found.

Crude oil prices lifted on the recent corporate earnings reports and oil finished the week at $87.40 a barrel.

Gold prices, coming off their recent lows in the past few weeks, ended the week at $1,636.10 an ounce.

Solid Gains on Wall Street

2011-10-15T11:44:00.002-04:00

All three major indexes recorded large gains this past week. The Dow moved up 4.9% for the week, the S&P 500 was up 6%, and the Nasdaq jumped 7.6%. Both the Dow and the Nasdaq moved into positive territory for the year, and the S&P 500 came close to doing the same. In fact, both the Nasdaq and S&P 500 had their best week in over two years.

Investors turned optimistic on economic data showing signs the U.S. economy was not moving into a recession, and the lack of any bad news out of Europe. The European debt crisis appears to be on hold until the end of this year with the most recent temporary bailout of Greece. Unfortunately, most analysts and investors still see no long-term viable solution to the euro zone problem. We expect by January,2012 we will be revisiting the entire issue of how Europe can escape the mountain of debt some European nations find themselves under. The euro zone debt crisis will continue to loom over our economy until a realistic solution is found.

The Commerce Dept. reported retail sales rose 1.1% in September, nearly double what Wall Street analysts had been expecting. The data may be a sign the consumer is once again spending and not feeling as gloomy as many surveys report. With consumer spending accounting for nearly two thirds of the U.S. economy, many analysts measure this data as a gauge of the health of the overall economy.

Oil prices rose on news of the improved economic data. After recently falling below the $80 level, crude prices finished the week at $87.31 a barrel.

Gold prices have also rebounded a bit from their recent lows and ended the week at $1,682.00 an ounce.

Europe Calms and Stocks Gain

2011-10-08T11:32:00.002-04:00

All three major indexes posted gains for the week. The gains were largely driven by new hopes European governments were close to agreement on pumping more money into the banking sector. The Dow was up 1.7% for the week, while the S&P500 rose 2.1%, and the Nasdaq added 2.6%.

Despite a better than expected Friday's job report, the market was down on Friday. It is just further proof that the market is being driven by headline European news. While the U.S. employment picture drove the market up early in the day, the announcement by Fitch that they were downgrading the credit ratings of Italy and Spain brought out the bears. Investors remain very skeptical that European policy makers will be able to deliver a long-term solution to the debt problems that plague Italy, Spain, Ireland, Portugal, and Greece. The structural problem of debt in Europe is so profound that most analysts can't see any solution except to apply a temporary fix to the problem and hope things get better. Unfortunately for investors, the dark cloud of uncertainty over the global economy will probably continue for quite some time. With globalization, the U.S. economy is deeply impacted by events in other nations and investors are aware that if events unravel in Europe, it will have severe consequences for our economy.

Oil prices rebounded from lows earlier in the week and finished Fridays trading session at just under $83 a barrel.

Gold prices continue to be under pressure and fell $17.50 and ounce on Friday to end the week at $1,635.80 an ounce.

The End of a Bad Quarter

2011-10-01T00:10:00.002-04:00

The dismal third quarter came to an end with a thump. The Dow fell 2.1% on Friday, the S&P 500 slid 2.5%, and the Nasdaq lost 2.6%. All three indexes ended the quarter with double-digit losses. It was the worst quarter since early 2009.

The debt crisis in Europe remains the central focus of investors. The crisis has caused extreme volatility in world markets. The market swings everyday on the latest news out of the euro zone. Unfortunately, the crisis will probably drag on for some time. Every solution the EU agrees to is nothing more than a temporary fix. What started as a Greek problem has morphed into a situation where international investors are now questioning the solvency of the European banking sector. There is so little transparency in European banks, investors are unsure how much exposure specific banks face in the case of a sovereign default. The Greek people will suffer regardless of the outcome of the crisis. They face either the prospect of harsh austerity programs, increased taxes, and anemic growth or an uncertain fate if they choose to default. In conclusion, the situation in Europe is a mess.

The economic data continues to indicate the global economy is slowing. Both the Federal Reserve and the IMF warned of increasing risks to the global recovery. Economists fear with the U.S. and European economies slowing to a snail's pace and if China cools down, there will be so little global growth we will slip into another recession.

Commodity prices continue to come under greater pressure. Gold finished the week at $1,631.90 an ounce and oil closed at $80.68 a barrel.

Volatility Continues

2011-09-24T11:49:00.002-04:00

What a difference a week makes. This past week was the worst week on Wall Street since October 2008. The Dow finished the week down 738 points. In fact, all three major indexes fell by more than 5% for the week. Just a week earlier, the market was up in all five trading sessions and showed a gain of nearly 5%. The volatility has been remarkable.

Investors are rattled that the global economy is teetering toward another recession. There is a growing frustration that European governments either cannot or will not fully address the debt crisis in the euro zone and Washington continues to be locked in a tug of war about how to deal with the debt and deficit problem. There is very little confidence to be found anywhere.

The Greek crisis has grown in recent weeks to more than just a question about the solvency of Greece itself, it now has investors questioning the soundness of the entire European banking sector and the ability of European officials to take any meaningful steps to address contagion.

On the domestic front, the Fed launched Operation Twist this week in an effort to further drive down long-term interest rates, but what really shook investors was the Fed's weak economic outlook. It is becoming increasingly more difficult to find virtually any economic forecast that sees anything better than a U.S. economy mired in anemic growth and high unemployment through 2012. And what has investors really spooked is that when an economy is that fragile, it runs a high risk of slipping into another recession.

Commodities prices were killed this past week as recession fears grew - copper prices plummeted, crude oil prices slipped below $80.00 a barrel before rebounding and finishing at $80.50 a barrel, and gold lost $97.00 an ounce to finish a brutal week at $1,644.70 an ounce.

Good Week on The Street

2011-09-17T00:00:00.002-04:00

Stocks posted gains every day this week for the first time in more than two months. Stocks rose each day despite the fact the euro zone debt crisis was on the edge of spiraling out of control for most of the week.

The Dow ended the week with a gain of 4.7%. The S&P 500 was up around 5% and the Nasdaq rose over 6%. It was the best five day gain on the Nasdaq in over two years.

Investors were optimistic that actions taken this week by the ECB and the Fed will offer a short term cure for Greece, but a lasting solution to the crisis in Europe is still far from being resolved. In fact, despite the rosy picture many government officials portray, many, if not most, analysts and investors continue to predict an eventual Greek default and some type of fracture in the euro. In a volatile concoction of economics, politics, and cultural differences, most astute watchers claim a long-term solution is nearly impossible to achieve.

As far as the U.S. economy is concerned, the latest data seems to support the notion the our economy is either heading for a recession or near zero growth. Weekly unemployment numbers have been trending upward and the Labor Dept. reports jobless rates are now heading higher in 26 states. The latest consumer confidence survey, while better than Wall Street had been expecting, showed consumer expectations at a low level not seen in over 30 years. In essence, the numbers show consumers are truly frightened about their future economic security.

Crude oil prices finished the week at $87.96 a barrel.

Gold rebounded from its lows earlier this week and ended the trading session on Friday at $1,814.70 an ounce.

Greek Debt Crisis Sinks Markets

2011-09-09T18:05:00.002-04:00

Stocks tumbled Friday on concerns of a possible Greek default. The sell-off triggered the sixth weekly decline in seven weeks. The Dow fell nearly 304 points on Friday, the S&P 500 dropped 32 points, and the Nasdaq slumped 61 points.

Investors fear a Greek default is growing more and more likely. Analysts on Wall Street are unsure what the secondary effects of a Greek default would do to global markets. The bad news out of Europe just kept piling up on Friday. First, Jurgen Stark, key member of the ECB executive board, resigned unexpectedly. Central bank watchers claimed Stark was leaving amid deep disagreements over the ECB's bond-buying program. Later in the afternoon, rumors began to fly that Germany was recapitalizing its banks in preparation for an inevitable default by Greece. The euro was pounded all day as investors fled to the dollar as a safe haven. The euro finished Friday's session at a seven-month low against the dollar at around $1.36.

As if European woes weren't enough, the domestic news regarding the economy was very gloomy on both Thursday and Friday. Fed Reserve Chairman, Ben Bernanke's Thursday speech depicted the U.S. economy as very fragile and facing many headwinds. And the morning after President Obama's jobs speech before congress, news came from Bank of America that they are considering cutting roughly 40,000 employees in the first wave of a restructuring plan.

Dismal Jobs Report Sinks Stocks

2011-09-03T12:15:00.002-04:00

Stocks closed out Friday sharply lower on the latest data from the Labor Dept. showing the U.S. job market is terrible. The employment data showed the economy created a zero net gain in the month of August. It was the worst jobs number since September of 2010. Investors fear the jobs report is yet another indicator the economy is either heading for a recession or is so very weak the slightest headwind could push us over the edge.

All three indexes on Friday posted their worst one day losses in more than two weeks. The Dow lost 2.2%, the Nasdaq fell 2.6%, and the S&P 500 dropped 2.5%. Friday's losses pretty much wiped out what had been a fairly positive week, and we ended the week posting little change.

Worried investors flocked to the safe havens of U.S. Treasuries and gold on recession fears. Gold climbed a whopping $47.80 an ounce or 2.6% and finished the week at $1,876.90 an ounce.

Oil prices tumbled on fear of a weakening economy, and probably would have fallen further except for disruption concerns regarding a weekend tropical storm hitting the oil producing areas in the Gulf of Mexico. Crude oil ended Friday's trading session down 2.5% at $86.45 a barrel.

Politics may be the leading indicator of this coming week's market performance. President Obama's Thursday night speech to Congress regarding a new round of job proposals will be watched closely by investors. The Wall Street reaction, and the republican reaction to the speech will possibly set the tone for next Friday's market response.

Finally, A Winning Week

2011-08-27T12:12:00.002-04:00

Stocks finally ended their recent losing streak. The recent week ended what had been a four-week losing streak. We ended the week on Wall Street with the Dow and the S&P both showing gains of more than 4%. The Nasdaq had a solid week, climbing 5.7%.

Federal Reserve Chairman Ben Bernanke's observations dominated Friday's market movement. The Dow was down over 200 points before Bernanke spoke, and soon afterwards, was showing a 150 point gain. While the Fed made no reference to any additional measures to boost growth, they did indicate they may take action in September when more data is available.

The Commerce Dept. revised down Q2 GDP to 1% from a previously reported 1.3%. The data is more fuel for the notion that the economy is slowing down to a snail's pace. The University of Michigan consumer survey came in slightly better than expected with a reading of 55.7 from the previous month's multi-year low of 54.9.

The dollar weakened against all major currencies.

Gold, rebounded from its major fall earlier in the week, and finished Friday at $1,822.60 an ounce. Gold had hit a new intra-day high of over $1,900 an ounce early last week before showing a major retreat into the $1,700 range.

Crude prices also rebounded from their range earlier in the week. Oil prices received a bounce from fears that hurricane Irene, scheduled to hit the Northeast this weekend, would disrupt supplies from refineries located in the storm's path. Crude oil prices closed Friday's session at $85.42 a barrel.

Much of this week's market movement will probably be driven by unemployment data, and political news and economic announcements coming from the euro zone concerning the European debt crisis.

Another Bad Week on Wall Street

2011-08-20T13:04:00.002-04:00

Stocks suffered another poor week amid concerns about the strength of the U.S. economy and worries regarding the European debt crisis. At week's end, all three indexes were down between 4% and 6%.

Global investors were rattled by continuing evidence the U.S. economy is weakening and may be slipping into a new recession. Investors also worry the European debt crisis may turn into a global banking crisis. Analysts and investors are deeply worried as to how sound many European bank's balance sheets are at the current time.

Investor confidence was shaken when Morgan Stanley cut global growth forecasts, saying the U.S. and Europe are dangerously close to a recession. Also, JPMorgan Chase cut its fourth quarter U.S. GDP forecast to 1% from 2.5% citing weakening data.

Regardless of whether or not we are recession-bound, the data and trends indicate the economy is slowing considerably. Earlier this quarter, many economists thought we had just hit a temporary "soft patch" due to the Japanese earthquake and a temporary spike in oil prices, but it is now becoming clear the global economy is slowing.

Investors, seeking a safe haven, have driven the price of gold skyward all week. Gold prices climbed to $1,881.40 an ounce during the week before pulling back to settle at Friday's close of $1,852.20 an ounce.

Oil prices, with a fear of reduced demand in a slowing global economy, dropped to below $80 a barrel earlier in the week and finished the week at $81.92 a barrel.

Dizzying Week on Wall Street

2011-08-13T11:36:00.002-04:00

The past week on Wall Street was one of the most volatile in history. Fear the U.S. economy is slipping into a recession and the growing European debt crisis had investors on edge all week. The market was down 600 points one day, up 400 or 500 points the next day, and then down again the following day ..... what a week! When the week was finally over and all the wild swings were concluded, the Dow finished down 1.5%. Markets calmed down a bit on Thursday and Friday as the situation in the EU abated, and the U.S economic data wasn't as negative as analysts had expected.

Investors found some solace in the latest retail sales report showing sales increased 0.5% in July, Wall Street was anticipating weaker numbers. The Commerce Dept. reported business inventories rose 0.3%, investors had been expecting 0.5%. On the down side, the latest Univ. of Michigan consumer sentiment reading for August fell sharply. The August reading of 54.9 was the lowest reading in over 30 years. Much of the negativity in the reading was centered on how gloomy consumers feel about the future rather than their current situation.

Commodities, much like equities, showed a great deal of volatility this past week. Crude oil prices, after falling below the $80 level earlier in the week, finished Friday's session at $86.38. Gold prices soared during the week before leveling out at the the week's end. After hitting the $1800 level earlier in the week, gold prices settled the week at $1,742.60 an ounce.

Message To Investors

2011-08-10T17:52:00.002-04:00

With all the recent turmoil and chaos in the markets, we thought it appropriate to keep our clients up to date on how we feel about the current situation and how we are addressing it.

The stock market is adjusting to a slowdown in global growth.

Nearly all the recent economic data indicates the U.S. economy has been weakening.

One key indicator (which historically is very accurate) involving the spread on Treasury bonds shows only a 1 in 125 chance of recession.

The European debt crisis continues to devolve. The European banking sector and issues with the euro will continue to depress markets.

We feel the chance of recession is now nearly 50%.

We see investment grade bonds, gold, shorting the euro, long/short commodity funds are hedges against the downturn.

We still feel U.S. stocks are very attractive for long-term investors but they could go lower in the short term.

Worst Week on Wall Street Since Crisis of 2008-2009

2011-08-06T12:24:00.002-04:00

Serious investor concerns about the health of the U.S. economy and the European debt crisis caused massive damage to equities this past week. Many investors and analysts also felt that this was probably the weekend when the S&P would downgrade the U.S. credit rating from AAA.

The Dow fell nearly 6% for the week, the S&P 500 dropped 7%, and the Nasdaq lost 8%. All three indexes had their worst week since the financial crisis of 2008-2009. Friday's session closed on a mixed note with the Dow up slightly, but the S&P 500 and the Nasdaq losing ground. Friday was marked with wild swings in the market. The Dow had a trading range of 400 points as investors tried to make sense of the economic news. At one point on Friday, the Dow was down 240 points.

While July's jobs number came in better than expected, the latest chapter in the EU debt crisis was dire. The latest domino to be near falling in Europe, Italy could be on the verge of a default. And what really has investors fretting is the fact that Italy, unlike Greece, is too big to save. Most investors and analysts openly admit that the EU debt story is not going to have a happy ending. The level of debt accumulated and future growth projections are such that it is almost impossible for some EU nations to ever do anything except default at some future point.

All three major indexes have erased their gains for 2011, and are now in "correction" territory. It is important investors remain focused on the long term. Despite the recent hammering stocks have taken in the past couple weeks, stock prices remain well above their lows of 2009.

Tough Week on Wall Street

2011-07-30T13:47:00.002-04:00

Stocks ended the week sharply lower, posting their worst weekly performance in more than a year. The blue-chip index tumbled nearly 538 points for the week, its largest drop since May of last year. The S&P500 suffered a 3.9% loss for the week. The Nasdaq, while still showing a loss for July, was the best performer.

The two greatest factors influencing the pessimism are investors growing increasingly worried that Washington may not reach a deal on the debt ceiling before the deadline, and the recent GDP data, which was a disaster. The GDP grew at a paltry 1.3% annual rate in the second quarter, and the first quarter GDP was revised down to 0.4% from 1.9%. The data reflects an economy that was at a near standstill earlier this year, and raises doubts about the economy's trajectory for the rest of the year. Economists claim the latest GDP numbers explain why the job market is in such terrible shape. It is generally felt by most economists that the economy requires a 3% or higher rate of growth to create new jobs.

The latest University of Michigan consumer sentiment survey suffered a steep drop to 63.7 from 71.5 at the end of June. Consumers have turned more sour about the economy, and analysts fret that it may weaken already anemic consumer spending.

Oil prices fell $1.74 to finish the week at $95.70 a barrel. Most oil analysts claimed the sell off in oil was due to the possibility of weaker future growth in the U.S. economy.

Gold prices climbed $14.90 an ounce to finish at $1,628.30. Gold hit an intraday record of $1,634.90 an ounce as investors worried about events in Washington and the recent data indicating the economy is weaker than previously believed.

Stocks End Week Higher

2011-07-23T10:20:00.002-04:00

Driven by strong earnings, all three major indexes ended the week higher. The Nasdaq climbed nearly 2.5% for the week, the Dow rose 1.4%, and the S&P 500 gained more than 2%.

Investors, for the most part, ignored the ongoing debt-ceiling battle in Washington and instead focused on the stream of good earnings reports throughout the week. International investors were pleased to see the EU settled the debt crisis, for the time being, with another series of bailouts for its weakest member. While the solution is just a temporary fix, a major crisis was avoided.

Gold prices broke through the $1,600 ceiling and finished the week at $1,601.50 an ounce.

Oil prices continued to climb throughout the week, flirting with $100 a barrel, and ended Friday's close at $99.87 a barrel.

Much of this coming week will probably be focused on economic data and the fluid situation in Washington regarding the debt-ceiling.

Jitters On Wall Street

2011-07-16T12:07:00.002-04:00

The past week was akin to a ride on a playground seesaw. The market moved to the upside earlier in the week when Fed Chairman Ben Bernanke indicated he would consider another round of quantitative easing if the economy continues to struggle. But on Thursday, Bernanke said the central bank may not be as willing to move toward further stimulus as previously believed. In addition to the flip-flop from the Fed, the market was on edge regarding the uncertainty of the U.S.'s debt ceiling talks in Washington.

The Dow was up 43 points or 0.3% on Friday. The S&P 500 finished Friday up 7 points or 0.6%, and the Nasdaq jumped 27 points or 1.0%. But for the week the Dow fell 1.4%, while the S&P 500 shed 2.1% and the Nasdaq dropped 2.5%.

As if investors didn't have enough to worry about between the debt ceiling and future moves by the Fed, the never ending saga of the European sovereign debt crisis goes on and on. Much of the focus in Europe this week was centered on Italy. It seems like every week or two there is another chapter in the European debt crisis.

In economic news, the University of Michigan consumer sentiment survey tumbled much more than Wall Street had been expecting. July's reading of 63.8 was far below the 71.4 most analysts had predicted.

The dollar strengthened against both the yen and the British pound, but was down versus the euro.

Gold prices climbed during the week, often flirting with the $1600 barrier. Gold finished Friday at $1594.20 an ounce.

Crude oil prices rose $1.72 on Friday and finished the week at $97.41 a barrel.

Terrible Jobs Data Turns Investors Sour

2011-07-09T12:16:00.003-04:00

Friday's jobs report showing hiring crawled to a near standstill in June put investors in a bearish mood. The Labor Department reported the economy created only 18,000 last month, while Wall Street had expected the number to be near 125,000. June's unemployment rate rose from 9.1% to 9.2%. As we said in the last issue of our Investor Commentary, we believe the current job market is much worse than the headline unemployment rate. When you examine the millions of unemployed workers, millions of part time workers unable to find full time work, and millions more who have just quit looking for work, it paints a picture of a job market in tatters.

Friday's closing numbers showed the Dow shedding 62 points or 0.5%, the Nasdaq also lost 0.5% or 13 points, while the S&P 500 fell 9 points or 0.7%. The closing numbers were not as bad as they could have been. In the afternoon hours of trading the market clawed back much of the day's early losses. Friday morning and early afternoon were marked by triple digit losses on the Dow. Despite Friday's losses, all three indexes showed gains for the holiday-shortened week, with the Nasdaq climbing 1.4%, the Dow rose 0.4%, and the S&P 500 climbed 0.2%.

This coming week will begin the latest earning's reports, which most analysts believe will show good news. There will also be news from the Fed on their outlook for the economy.

Gold continued its rebound after sinking earlier in the week and finished the week at $1541.60 an ounce.

Oil fell $2.47 on Friday and closed at $96.20 a barrel.

Early Fireworks on Wall Street

2011-07-02T12:43:00.003-04:00

Wall Street put on their own early pyrotechnics display this past week. Markets posted the strongest week since July 2009 for all three indexes. The gains this past week were so strong they nearly erased all of June's losses. Both the Dow and the S&P 500 were more than 5% higher for the week, and the Nasdaq skyrocketed over 6%.

The two major moving factors for the week were the temporary fix in Europe regarding the Greek debt crisis and strong economic data here at home. A stronger-than-expected report from the Institute of Supply Management regarding the manufactoring sector gave a strong boost of optimism to investors about the state of the U.S. economy. Many investors, previous to the latest data, had been anticipating a weak economy through the summer months.

Other not-so-positive economic data was shrugged off by investors. The latest Univ. of Michigan consumer sentiment survey for June fell slightly and construction spending fell more than Wall Street had expected.

Crude oil prices finished the week at $94.94 a barrel. According to AAA, gasoline prices ended their near month long trend downward at the pump, and showed a slight increase for the past week.

Gold prices fell $20.20 and settled at $1,482.60 an ounce on Friday.

U.S. markets will be closed on Monday in observance of Independence Day.

Tech Stocks Drag Down Market

2011-06-25T12:30:00.003-04:00

Markets slid Friday on disappointing news from both Oracle and Micron Technology. Micron shares fell 13%, after the chip maker posted a profit that was less than half of what Wall Street had been expecting. Oracle's per share earnings were in line, but the company reported its hardware division was struggling. Shares of Oracle slipped more than 4%. In addition to the poor performance in the tech sector, investors were still on edge regarding the European debt crisis.

The Dow finished Friday down 115 points and reported a loss of 0.6% for the week. It was the seventh weekly loss in the last eight weeks for the Dow. The tech heavy Nasdaq was the biggest loser on Friday, with the composite tumbling 1.3%. The S&P 500 shed 1.2% to close at 1,268.

Investors continue to follow events in the euro zone surrounding a possible default by Greece. The EU agreed to another bailout for Greece which is contingent on the Greek government passing another series of austerity measures. The deal is not yet done. An overwhelming percentage of the Greek population is opposed to any further cuts in pay and services. The vote on the new austerity package, scheduled for this week, is said to be very close. Investors will continue to watch events in the euro zone very close this coming week.

In a surprise move, the U.S. tapped into its strategic oil reserve which had the effect of driving down the price of oil to below $90 a barrel earlier in the week. Crude oil prices closed Friday at $91.16 a barrel.

The price of gold tumbled this week. On Friday, gold tumbled $17.90 an ounce and nearly fell below the $1,500 mark to close at $1,502.60 an ounce.

Dow Shows Modest Gain For Week

2011-06-18T18:01:00.002-04:00

The Dow broke its current losing streak and finished the week with a modest gain. The gain was lead by a sharp drop in oil prices and mixed economic news. The Dow closed Friday at 12,004. It was the first gain for the blue chips since late April. The S&P 500 finished the week nearly unchanged, and the Nasdaq continued to struggle with a weekly decline of about 1%.

The recent decline in oil prices and hopeful news regarding the Greek debt crisis had investors moving toward a more bullish outlook. Oil prices have fallen more than 4% in the recent week and closed Friday at $93.01 a barrel. The European debt crisis continues unresolved but it appears there will be some short term fix which will avoid an immediate default by Greece. Technology stocks continue to come under pressure. The Nasdaq was dragged down Friday with news Reasearch in Motion (RIMM) slashed its full-year forecast by 30% and planned to layoff workers. Shares of RIMM plummeted more than 20%.

The most recent economic news was a mixed bag. The University of Michigan consumer survey fell to a reading of 71.8. The number was worse than economists had been expecting. A bit of optimism was seen with the Conference Board's Leading Economic Indicators reporting a gain of 0.8% for May. The gain was double what Wall Street had been anticipating.

Markets gave back much of their earlier Friday gains when Moody's credit agency announced late in the day that it was placing Italy on watch for a possible credit downgrade. Investors are worried about the mounting debt crisis in Europe and its impact on the global economy and specifically, the possible profound fallout the crisis would have on the U.S. economy.

Slide Continues on Wall Street

2011-06-10T23:50:00.003-04:00

Stocks continued their slide for the sixth straight week. It is now the longest losing streak since 2002. Stocks retreated broadly on Friday, with the Dow falling below 12,000 for the first time since April. The Dow finished Friday at just below 11,952, the S&P 500 lost 18 points to close at 1,271 and the Nasdaq dropped 41 points to 2,644.

The stock sell-off began Friday after Travelers Insurance announced it faced $1 billion in losses related to the recent storms and floods in the Midwest and South. The sell-off spread to other insurance stocks and the broader market.

Investor's have grown cautious in the past month as many fear the recent turn down in the economy is greater than just a "soft patch." Continued worries about slowing Asian growth and a growing anxiety that the Greek debt situation is unsolvable short of a default have many investors leaning toward the bear side.

Asian markets ended the session mixed. Toyota announced the fallout from the earthquake and tsunami would continue to hurt sales and disrupt supply chains across the industry. Toyota said it could lose $1.6 billion in profits this year and expects losses to spill over into next year. The degree that the Japanese disasters have played in the global slowdown are impossible to gauge. Many analysts claim the earthquake is responsible for a good percentage of the softness in world markets and that is should ease by late summer.

Commodity prices were hit hard on Friday. Silver and oil prices fell nearly 3%.

Rough Week For Equities

2011-06-04T11:58:00.002-04:00

Equity markets fell again this week. It was the fifth straight losing week for both the S&P and the Dow. The Dow is on its longest losing streak since 2004. Stocks fell on Friday, with the Dow retreating 97 points (0.8%), the Nasdaq gave up 41 points, and the S&P 500 shed 13 points. Friday's sell-off was wide ranging, with 28 out of 30 components ending the day lower.

Much of the week's loss was based on terrible employment data from both the ADP payroll report on Wednesday and Friday's jobs numbers from the Labor Dept. Most of the economic data for the entire week did little to inspire confidence in investors.

There has been growing evidence for much of the past month that the strength of the economic recovery is in question. Investors are uncertain as to the cause of the slowdown. Many analysts believe the recovery has hit a soft patch due to the fallout from the Japanese earthquake, Europe's debt crisis, and a spike in gasoline prices. Japanese industrial leaders expect Japan's manufacturing sector to return by mid-summer. The debt crisis in the euro zone continues to drag on and on. Just this week, Moody's downgraded eight Greek banks and lowered the Greek government's credit rating to "Caa1," the third lowest rating in Moody's rating system. And while gasoline prices have retreated a bit, crude oil prices continue to remain near $100 a barrel.

Gold prices rose $9.70 to finish the week at $1,541.90.

Quiet Day on Wall Street Before Holiday

2011-05-28T10:24:00.002-04:00

Trading was subdued on Friday, but markets finished the day higher. The Dow gained 39 points or 0.3%, the S&P 500 rose 0.4% or 5 points, and the Nasdaq climbed 14 points or 0.5%. Despite the modest gains on Friday, all three indexes finished the week with small losses.

The last economic data before the Memorial Day holiday was mixed. The University of Michigan consumer sentiment survey for May was more positive than analysts had expected, but the latest pending home sales data was far worse than Wall Street anticipated. The housing sector remains in a near depression-like malaise. Real estate analysts worry that with home prices falling once again, potential buyers have moved back to the sidelines and are awaiting lower prices before making an offer.

Overall, stocks have struggled for much of the month of May. All three major indexes are down about 3% for the month. While more and more of the data indicates the economy is growing soft, investors can't agree on the why. Some analysts claim it is due to the loss of manufacturing capabilities in Japan following the massive earthquake. Other investors fret that the global economy is slowing.

Oil closed on Friday up 36 cents a barrel at $100.59. Gold finished the day up $13.50 at $1,536.30 an ounce.

The dollar was down against the euro, yen, and British pound.

The stock market will be closed Monday for Memorial Day.

Poor Retail Data Turns Market Sour

2011-05-21T10:10:00.002-04:00

Stocks finished the day lower Friday, amid poor outlooks from some retailers and more bad news concerning Greece. The Dow fell 93 points or 0.7%, the S&P 500 shed 10 points or 0.8%, and the Nasdaq lost 20 points or 0.7%.

Shares of Gap and Aeropostale fell sharply on Friday after both companies lowered their full year guidance due to higher commodity prices and weaker demand. Retail analysts are jittery that the recent retail data indicates a possible retreat by consumers. There has been a growing anxiety among some analysts about the impact high gasoline prices are going to have on consumers. Meanwhile, investors are worried about sovereign debt problems in the euro zone. On Friday, Fitch Ratings knocked Greece's credit rating down three notches. The downgrade now pushes Greek bonds into the "highly speculative" junk bond territory. There is a growing sense on Wall Street that the only way for Greece to escape the mountain of debt they have amassed is with a default at some point in time.

Commodity prices rebounded on Friday. Gold gained $16.50 an ounce and pushed pass the $1,500 dollar barrier to finish the day at $1,508.90. Crude oil prices rose 1.2% to settle at $100.10 a barrel. Oil prices have largely settled in around the $100 a barrel price for the last couple weeks and some analysts see this price holding as long as there is no unexpected geopolitical event unfolding that would roil global markets.

Roller Coaster Week Leaves Stocks Mostly Unchanged

2011-05-13T18:40:00.002-04:00

Stocks ended a volatile week down slightly. Markets gyrated in tandem with commodity prices and currency exchanges. The Dow tumbled 100 points on Friday, the S&P 500 lost 11 points and the Nasdaq fell 35 points.

Investors spent much of the choppy week keeping a close eye on oil prices and the debt crisis in the euro zone. The euro has been under increasing pressure as the sovereign debt crisis in Portugal, Ireland, and Greece continues to plague the entire euro zone. The dollar rose 1% against the euro and nearly 0.7% against the British pound during Friday's afternoon trading session. Investors fear as the euro weakens and the dollar strengthens it will make it much harder for American companies to compete against European exports, and in turn, cut into the profits of U.S. corporations.

The stronger dollar also weighed heavily on commodity prices. Oil prices are far off their highs of last month. Analysts and investors are uncertain if the recent decline in commodity prices is a signal of weakening economic growth in the U.S. or if the drop in prices is due to a flight of money out of the hot commodities market.

The high level of volatility in stocks and commodities will probably be the dominant theme this coming week in the equate markets. There will also be the continued focus on the euro zone and how the politicians maneuver to bailout the continent's most indebted members.

Stocks Sputter, End Week Lower

2011-05-08T12:45:00.002-04:00

Mixed economic data resulted in small stock gains on Friday, but all three indexes finished the week down more than 1%.

Friday morning saw the Dow rise 175 points on a better than expected jobs report, but afternoon rumors regarding the euro dampened the enthusiasm. At Friday's close, the Dow was up 55 points to 12,639. The S&P500 rose 5 points to close at 1340, while the Nasdaq climbed 13 points to end the day at 2,828. Friday's early gains were mostly erased after the German magazine Der Spiegel reported that Greek officials were discussing abandoning the euro. While it seems unlikely Greece would abandon the euro, just the fact they are discussing it has investors fretting. A growing number of economists believe the euro's future is uncertain, and at some point the common currency system in Europe will need to be revamped due to the great disparity between the wealthiest European nations and the heavily indebted poorer members.

Oil prices plunged during the past week. Crude oil prices fell 8.6% on Thursday and fell below $100 a barrel for the first time since March. Oil fell 2.6% on Friday and finished the week at $97.18 a barrel.

Gold prices also plummeted this past week, but rebounded a bit on Friday. Gold advanced $10.40 an ounce on Friday to close at $1,491.70.

The dollar gained 1.1% against the euro after the news out of Greece and also gained against the yen, but fell against the British pound.

Stocks Up Sharply In April

2011-05-01T11:42:00.002-04:00

April was the best month this year for stocks. All three indexes had strong gains. The Dow gained 490.81 points (4%) for the month, finishing Friday's trading session at 12,811. April's gains brought the Dow to a new multi-year high. The S&P 500 concluded the month posting a gain of 3.3%. The tech heavy Nasdaq reported the greatest gain and as of Friday's close was up 4.2% for the month of April. Good earning's report have given investors a real confidence boost.

Stocks continue to post gains even as many investors voice concerns about the economy and inflation. Most indications from the Fed are pretty clear that they have no intention of boosting interest rates this year. Gold and silver prices continue to hit new highs as the dollar keeps sliding lower. The dollar has now fallen to a three year low against the euro.

Many analysts worry about the fallout from the continued high price of oil. Crude oil closed Friday up 84 cents a barrel at $113.71. Industry experts feel oil prices may not climb much higher, but many see the price remaining elevated at the current price.

Gold, benefiting from a weak dollar, closed at a record high $1,569.80.

Dow Moves To a Three Year High

2011-04-22T11:22:00.002-04:00

This past week, a slew of strong earnings drove the Dow to nearly a 3-year high. All three major indexes finished higher for the week. The Nasdaq increased 2% with the Dow and S&P 500 climbing about 1.3%.

Thursday's gains were tempered by disappointing economic reports. The Philadelphia Fed reported its manufacturing index slumped much deeper than analysts had expected. Also, the weekly jobless data showed a smaller gain than Wall Street was anticipating.

Despite the worse than expected economic data, markets were moved by a surge in corporate earnings. Most analysts see earnings as continuing to be the main driver to pushing stocks higher this coming week. So far this earning season, a great majority of S&P 500 companies have beaten Wall Street expectations.

Commodity prices continue to climb. The dollar fell against the yen, euro, and British pound. The combination of a falling dollar, and the continued unrest in the Middle East and North Africa have pushed the price of a barrel of oil to over $112.00. Economists are growing more and more concerned about how the price of gasoline is going to impact the still fragile U.S. economic recovery. Fears about inflation and global uncertainty are driving precious metal prices higher and higher. Gold prices pushed past the $1500 barrier this week. Gold finished Thursday's session at $1,503.80 an ounce.

Stocks Gain on Economic News

2011-04-15T19:22:00.003-04:00

Markets closed higher on Friday thanks to positive economic news. The Labor Department's latest CPI showed that while food and gas prices have soared recently, the core CPI remains well in check. The other good economic news was from the University of Michigan's consumer sentiment index. The index rose to a higher reading than had been expected by Wall Street.

The Dow finished the day up 57 points and the S&P 500 gained 5 points. The Nasdaq lagged behind the other indexes and rose only 4 points. The overall tech market was dragged down by the performance of Google, which fell well short of earlier earnings expectations. For the week, all three indexes finished lower as investors worry that many companies will now be forced to pass on the expense of high commodity prices to consumers which will squeeze earnings.

Global investors were focused on China. The latest data shows inflation running at 5% for the first quarter, mostly driven by a surge in food prices. Another worry for international investors was Ireland. Moody's Investor Service hit Ireland with yet another downgrade. Moody's has now downgraded the Emerald Isle to one notch above junk status.

The dollar finished Friday higher against the euro, but lower against both the yen and the British pound.

Crude oil prices, while falling earlier in the week, rebounded later in the week and ended Friday higher by $1.30 at $109.41 a barrel.

Precious metals continued to climb higher with gold prices surging to recent highs. Gold closed out the week at $1,486.80 an ounce.

Much of this coming week's market performance will probably be linked to geopolitical events in Libya's civil war and the ongoing nuclear crisis in Japan. Analysts and investors will also be watching earnings reports, and some hint from corporate leaders on the outlook for Q2.

Oil Prices Spike, Investors Worry

2011-04-09T11:41:00.002-04:00

Stocks slipped on Friday. The Dow fell 29 points to finish the day at 12,380, the S&P500 lost 5.4 points and the Nasdaq retreated 16 points. For the week, the Nasdaq and S&P lost 0.3% while the Dow showed a minuscule gain.

Investors were on edge much of the week. Worries about a possible government shutdown, a powerful new earthquake in Japan, commodity prices surging, and how the EU will handle the possible bailout of Portugal. The recent run-up in commodity prices, especially oil, has many investors nervous. More and more analysts and economists see oil prices as becoming a critical issue. At the heart of the matter is the question of how much impact surging commodity prices will have on both corporate earnings and the fragile economic recovery.

Some analysts worry commodities are going to start pressuring corporate profit margins, especially those companies that are highly reliant on certain commodities. Economists are nervous high gasoline prices will spark a cut back in consumer spending as shoppers spend more of their income at the gas pump and less at the mall. Gasoline prices have a profound impact on not only Americans spending habits, but they are also a central player in consumer sentiment regarding the overall economy. High pump prices typically cause consumers to see their own financial situation as worsening and quickly lead to a drop in the consumer sentiment index.

On Friday, oil prices surged to over $113 a barrel. A combination of the latest earthquake in Japan, and a growing belief the situation in Libya is not going to end quickly lead to a week where oil prices charged higher and higher. Precious metals also rallied much of the week. Gold prices closed on Friday over $1,473 an ounce, and silver rose to more than $40 an ounce.

Employment Report Pushes Market Higher

2011-04-02T10:52:00.002-04:00

The three major indexes finished higher on Friday mostly on the March employment numbers. The report from the Labor Department showed the economy added 216,000 jobs in March, and the unemployment rate dipped to 8.8%. The jobs report was the latest data indicating the U.S. economy is in a very slow recovery. The 8.8% unemployment rate, while historically very high, is now at its lowest level in two years.

The market probably would have finished even higher for the week if not for other economic news that was not quite so optimistic. The ISM manufacturing index fell slightly in March and came in lower than most analysts had predicted. Also, the Commerce Department's monthly report on construction showed a drop of 1.4% in February. Economists had been expecting a smaller decline of near 0.5%.

Despite high oil prices, geopolitical chaos in the Middle East and North Africa, and the ongoing nuclear crisis in Japan, investors remain overly bullish as markets continue to move higher on mildly and often mixed economic data. Proof of the bullishness is that the Dow now stands near its 52 week high.

Oil prices continue to climb higher as investors worry that the turmoil in Libya may evolve into a protracted civil war rather than just the removal of a thug dictator. Crude oil prices closed Friday at $108.12 a barrel. Markets don't like uncertainty and this week's events in Libya have added a great deal of uncertainty to the oil market.

Tech Stocks Drive Market Higher

2011-03-26T17:55:00.002-04:00

The three major indexes all closed higher on Friday finishing a very positive week on Wall Street. On Friday, the Dow gained 50 points (0.4%), the Nasdaq rose 6.6 points (0.2%), and the S&p500 climbed 4.1 points (0.3%). For the week, the Dow was more than 3%, the Nasdaq surged 3.7%, and the S&P 5oo rose 2.7%. It was the best weekly performance for the Dow since July, 2010.

Strong earnings in the technology sector lifted the market on both Thursday and Friday. IBM and Oracle both finished the day 1.5% higher. Investors disregarded the ongoing turmoil in the Middle East and the continuing aftermath of the earthquake/tsunami/nuclear crisis in Japan.

The latest economic data did little to move the market on Friday. The final reading of the fourth quarter GDP showed a growth rate of 3.1%, which was an upgrade from the prior estimate of 2.8%. Also, the latest University of Michigan consumer sentiment survey for March was 68.2, which was in the range of what many economists had expected.

Oil prices remained elevated in the face of the growing protests in the Middle East and North Africa. Most analysts look for oil to stay in its present range of near $100 a barrel until the unrest ends in the Arab oil producing region. Oil finished the day at $105.52 a barrel. Gold ended Friday's trading session at $1,426.20 an ounce.

Markets will most likely be driven this coming week by geopolitical events in the Mideast, the nuclear crisis in Japan, and the monthly employment figures.

Japanese Disaster Drags Down Markets

2011-03-18T20:04:00.002-04:00

Earlier this week, the tragic earthquake/tsunami and ongoing nuclear crisis in Japan roiled global markets. Stocks rebounded on Thursday and Friday but couldn't wipe out the week's earlier losses.

For the week, the Dow fell 1.5%, the S&P 500 was off 1.9%, and the Nasdaq lost 2.7%. The turmoil in the Middle East and the Japanese quake have erased much of the gains for the year. As of Friday's close, the Dow and S&P500 remained modestly higher for the year to date, but the Nasdaq has now retreated into negative territory for the year, down 0.4%.

Friday's higher close, was driven by news of Libya's cease-fire, the G-7 decision to intervene in the soaring Japanese yen, and the Fed's announcement to allow several big banks to raise dividends and buy back shares.

News of the United Nation's vote to impose a no-fly zone over Libya calmed the oil market. Crude prices finished the day at $101.15 a barrel after having climbed to near $104 a barrel earlier in the session.

The Group of Seven's intervention to prevent the yen from moving even higher was seen as a positive move. The Japanese economy is heavily dependent on exports and a strong yen would be another hurdle for their battered economy to overcome.

Gold prices rose $11.90 an ounce, to finish the week at $1416.10 an ounce.

Indexes Post Weekly Loss

2011-03-13T11:41:00.002-04:00

Despite Friday's gains, all three major indexes posted a loss for the week. It marked the second weekly decline in the last three weeks. For the week, the Dow retreated 1%, the S&P500 fell 1.3% and the Nasdaq was off 2.5%. The S&P500 Index has now dropped to its lowest level since late January.

The major news story moved from the unrest in the Arab oil-producing nations to the enormous earthquake in Japan. Investors are attempting to digest the implications of such a great disaster on markets. Some investors worry about the impact the quake will have on Japan's economic recovery and the resulting increase in Japan's already massive public debt, which was 200% of GDP before the quake. While the full extent of the damage in Japan is still unknown, some reports claim the worst damage appears to be located in one of Japan's largest industrial areas. What companies suffered losses and how many plants are damaged has many global investors fretting.

Other reports out this week have also been mixed and slightly less optimistic about the global economy. China's trade deficit was the biggest in seven months. The U.S. weekly jobless claims rose higher than expected, retail sales were up less than expected, and consumer sentiment dropped. The bright spot for the week was the data showing U.S. business sales increased in January by the largest amount in 10 months.

Crude oil prices fell back to near $100 a barrel during the week. Analysts point to less protests and unrest in the Middle East, and the earthquake. Japan is the third largest oil-consuming nation and analysts see less global demand for oil while Japan recovers from the devastating quake.

Oil Prices Dominate Markets

2011-03-05T12:01:00.002-05:00

The continued strife and possible expansion of unrest in the Middle East has brought tremendous volatility to oil markets and rattled investors. Throughout the past week markets moved up and down on news and rumors from various Arab oil-producing nations.

Crude prices jumped $2.90 to near $105.00 a barrel on Friday, on news of increased fighting in Libya and rumors of planned protests in Saudi Arabia. Unfortunately, stock performance will probably continue to mirror the price of oil. Rising energy costs will remain a nagging headwind to the equity markets.

Despite Friday's 88 point drop in the Dow, near ten point loss on the S&P500, and 14 point slide on the Nasdaq, all three indexes ended the week with a slight gain. Friday's job report was in line with expectations, and while good news, it was overshadowed by the turmoil in the oil markets. What has many investors worried is how long will oil prices remain at this elevated price and how much impact energy prices will have on future job growth and the overall recovery. Historically, prices at the gas pump have had a profound influence on consumer sentiment, and often impact consumer spending.

Gold prices rose $12.20 an ounce and finished the day at $1,428.60 an ounce.

Volatile Week on Wall Street

2011-02-26T18:32:00.002-05:00

Despite stocks closing solidly higher on Friday, the past week saw the worst week for stocks since last November. Unrest in Libya, and fear about the fallout in the oil market drove the market down for three consecutive days. For the week, the Dow fell 2.1%, the Nasdaq lost 1.9%, and the S&P 500 slipped 1.7%. Rapidly soaring oil prices were the principal cause for the tumble.

On Friday, markets showed gains when it appeared the price of crude was stabilizing, and the news broke that Boeing had won a $35 billion deal to construct the next generation of in-flight tankers for the Air Force. Boeing finished the day up 2.2%. Friday's gains came in spite of the GDP revision which reported a much lower GDP than the 3.3% increase economists had predicted. The Bureau of Economic Analysis reported real GDP increased at an annual rate of 2.8% in the fourth quarter.

Going forward into the new week, oil prices will remain the focal point for investors. If the violence in the Arab countries continues or spreads it will bring more fear into the stock market. Another important factor in market moves will be the February job's report.

Gold prices fell $6.50 an ounce on Friday, but still finished the week at $1,408.30 and ounce.

Crude prices rose 91 cents for the day and ended the trading session at $98.19 a barrel.

Stocks Climb For Third Consecutive Week

2011-02-20T12:15:00.002-05:00

Stocks extended their winning streak for a third straight week. Neither a new round of monetary tightening in China nor the upheaval spreading across the Middle East could dampen the upward trend. Investor bullishness is running strong and hence the three major indexes now stand at their highest closing point in over 2 1/2 years.

The Dow closed up 73.11 points (0.6%) on Friday. The Dow has now gained 4.8% over the past three weeks. Friday's close of 12,391 was the highest close since June 2008. The Nasdaq Composite ended the week at 2833.95, its highest closing point since October 2007. The S&P 500 index finished Friday at 1343.01. Like the Dow, the Standard & Poor's 500 index is now at its highest level since June 2008.

Crude oil ended up 16 cents on Friday to finish the day at $86.15 a barrel.

Gold climbed $3.50 an ounce at $1389.40.

Silver has become a very hot commodity and now stands at a 31 year high. It finished the week at $32.29 an ounce. Silver enjoys the best of both worlds in the eyes of many investors. The metal can not only be used as a hedge against inflation worries, much like gold, but it has greater industrial applications than does gold. Therefore, it appeals to two classes of investors: those who are concerned about possible inflation, and also those investors who are bullish about global growth and see a growing need for silver in industrial manufacturing.

Stocks End Week at High Point

2011-02-12T11:47:00.002-05:00

The S&P 500 and the Dow ended Friday's session at their highest levels since June, 2008. All three of the major indexes finished the week more than 1% higher.

Friday's trading was lifted by the news out of Egypt that it appears the transition of power may be peaceful and commerce may return to normalized levels fairly quickly. The other good news on Friday was the latest consumer sentiment index from the University of Michigan. The index edged up from January's 74.2 to 75.1, and reflects consumers continue to feel good that the economy is slowly improving. Some analysts fretted that once the Christmas season ended, consumers would close their wallets and retail sales would suffer. But it now appears, after the best back-to- school session in four years and the best Christmas sales in five years, consumer spending remains to strengthen.

The Dow Jones industrial average gained 44 points (0.4%) on Friday, while the Nasdaq was up 19 points (0.7%) and the S&P 500 rose 7 points (0.6%).

Global markets closed higher on Friday's news from Egypt. The dollar was up against the euro, yen, and pound.

Oil prices fell $1.15 with crude closing Friday's trading session at $85.58 a barrel.

Gold slid $2.10 an ounce to end the day at $1360.40.

Stocks Finish Week Higher

2011-02-05T11:51:00.002-05:00

Stocks wrapped up a choppy day Friday and an overall choppy week to finish with gains of more than 2 percent. For the week, the Nasdaq added more than 3%, the Dow rose just short of 2.3%, and the S&P 500 was up 2.7%.

On Friday, stocks made a late-day rally after a seesaw session of small gains and small losses. The day began with a confusing and disappointing jobs report. The forecast for job gains of January were way off the mark, with the Labor Dept. reporting the economy added only 36,000 jobs in the month. Yet even with the anemic job creation, the unemployment rate fell from 9.4% to 9.0%. Economists are uncertain how to read the tea leaves when it comes to the U.S. employment picture. Harsh weather, new census numbers, and statistics revealing a growing number of people who have given up looking for jobs has left Labor officials unsure of what to make of the jobs number.

The turmoil in Egypt continues into its second week. It appears markets have already priced the geopolitical risk from Egypt into stocks, but there is concern regarding signals that the upheaval in the region may be spreading. Protests and riots have been reported breaking out in numerous countries, including Jordan, Yemen, and Syria.

Crude oil prices fell after the initial fear regarding Egypt and finished Friday at $88.88 a barrel. Gold was down $3.30 an ounce and ended the day at $1,349.70 an ounce.

Stocks Plunge Due To Political Turmoil

2011-01-29T11:56:00.002-05:00

All three major indices suffered their worst daily losses in months as the situation in Egypt deteriorated. The political turmoil caused the Dow to drop 166 points, the S&P 500 fell 23 points, and the Nasdaq lost a whopping 68 points. Much of the investor sell off was driven by the belief that events in Egypt will intensify over the weekend. Some analysts raised questions about the ability of the Egyptian government to maintain power until Monday morning.

Crude oil prices rallied over 4% and finished the session at $89.34 a barrel. Global investors fret events in Egypt may cause an interruption to tankers passing through the Suez Canal. The canal handles more than 8% of global sea trade. The VIX, a volatility index used to gauge fear in the market, soared over 24% on Friday.

Friday's domestic economic news, while positive, couldn't override the chaos unfolding in Egypt. The U.S. GDP for the fourth quarter came in at 3.2.% - lower than Wall Street's expectation of 3.5% but still better than the 2.6% rate of growth seen in the third quarter. Also, the latest consumer sentiment index rose to 74.2, beating the 73.2 reading most economists were predicting, and the latest measure of consumer spending showed the strongest increase in four years.

The global unrest helped drive gold futures up $22.30 an ounce. Friday's closing gold price stood at $1340.70 an ounce.

Stocks Finish With Modest Loss

2011-01-21T01:13:00.002-05:00

Stocks closed Thursday's trading session down slightly. The Dow ended the day down nearly 3 points, the S&P 500 fell 1 point, and the Nasdaq slid 21 points. Wednesday saw tech stocks suffering their biggest one-day loss in almost two months.

Thursday's driving force was a report showing China's GDP expanded in the fourth quarter of 2010 at an annual rate of 9.8%. Many investors fear the Chinese economy is becoming overheated and the government will have to further tighten its monetary policy and hike interest rates. Until there are signs of moderation in China's growth and a corresponding slowdown in the rate of inflation, investors will probably remain jittery. Needless to say, Asian markets ended the day down sharply - with the Shanghai Composite falling nearly 3%.

The news from China overshadowed better-than-expected reports on U.S. home sales and weekly jobless claims. Sales of existing homes increased 12% in December and the number of Americans filing for first time unemployment benefits fell by 37,000 to 404,000.

Oil prices fell sharply after the release of a report showing a sharp increase in U.S. crude oil supplies. The inventory increase was much higher than analysts had predicted and oil prices tumbled. Oil finished the day down $2.22 a barrel at $89.59.

Gold prices tumbled $23.70 to end the session at $1,346.50.

Waiting on The Taxman

2010-12-14T01:24:00.003-05:00

Stocks had a lackluster day on Monday as investors awaited resolution on the tax deal coming out of Washington. When the final bell rang, the Dow ended up 18 points, the Nasdaq down 13 points, and the S&P 500 was nearly unchanged.

With no major economic data released on Monday, most investors were watching Washington and any indication of how the vote on the Bush tax cuts would unfold. Most pundits believe there will be some extension of the cuts and most analysts feel the market has already priced the extension into the market.

Last Friday marked the highest level the S&P500 has reached in two years and is now 11% higher for the year. The S&P now stands 89% above its 2009 low point.

While Asian markets closed higher, many China watchers see signs that China may be considering an interest rate hike. China's economy has been booming, and there are growing signals that the government may be preparing to boost rates to slow the economy. China is a huge import market, and some investors fear a slowing economy in China could impact the U.S. economic recovery as we rely heavily on exports.

A number of economic reports released later this week - new home construction, unemployment numbers, consumer prices, and of course any news regarding the final tax bill will probably be driving the market.

Gold finished the day up over $13 dollars at $1,398 an ounce. Commodities continue to move upward. Oil was higher at the close at $88.61 a barrel. There is a growing concern about the price of crude - some economists worry that if oil moves into the $90 - $100 range, it could slow the recovery and deeply impact consumer spending. Prices at the gas pump have a profound impact on how consumers spend and how they feel about the overall economy.

Quiet Day on Wall Street

2010-12-07T00:09:00.002-05:00

Monday brought a lower than average trading day on Wall Street. Volume was light as investors had little economic news to digest except for Fed Chairman Bernanke's most recent interview on television. Bernanke said it could be 4 or 5 years before unemployment falls to a more normal level in the U.S. He also said it's possible the central bank could resort to yet another round of stimulus by buying up Treasuries.

Markets finished the day mixed. The Nasdaq closed 3 points higher, the Dow fell 20 points, and the S&P500 ended the day down 2 points.

As the stock market drifted, commodities surged - especially oil and precious metals. Oil moved to a new two-year high and finished the trading day up 19 cents at $89.38 a barrel. Gold rose $9.90 an ounce and closed at $1,421.20. Silver hit a new 30 year high during the trading session of $30.05 before ending the day at $29.74 an ounce.

The dollar was stronger against the euro, the British pound, and the yen. The euro continues to come on pressure as the European debt crisis continues to unfold.

Early November Gains Falter

2010-12-01T01:03:00.002-05:00

Stocks started November like a lion but finished the month like a lamb. Tuesday's final bell saw the market down for the day and down for the month. All three indexes closed down slightly for the month of November.

The Dow closed down 46 points on Tuesday, the S&P500 fell 7 points and the Nasdaq dropped 27 points. The economic news for the day was mixed. The latest consumer confidence report showed the index higher than analysts had expected but the third quarter Case-Shiller index of home prices brought bad news. Home prices in the last quarter fell 2% while real estate experts were expecting a gain of 1%.

While November started off strong with the Dow and Nasdaq hitting two-year highs following the large Republican election victory and the Fed announcing another round of quantitative easing - the latter part of the month was dominated by disturbing news regarding the prolonged European debt problems. Once again, the usual European suspects - Ireland, Portugal, and Spain caused investors to become cautious. Many investors worry that the debt-ridden nations of Europe will at some point require a massive bailout and cause a slow down in the euro-zone and impact the value of the euro against the dollar.

The dollar finished higher on Tuesday against both the pound and the euro but was down against the yen. The dollar often becomes a safe haven for international investors in times of economic uncertainty like that which is unfolding in the euro-zone.

Crude prices fell $1.62 on Tuesday, to close at $84.11 a barrel. Gold jumped over $18 an ounce to end the day at $1,384 an ounce.

Stocks End Week Unchanged

2010-11-20T11:12:00.002-05:00

Stocks closed out a lackluster week just above the break even point. All three indexes were virtually unchanged from a week ago.

The week started on fears stemming from the Irish debt crisis and rumors China would be increasing their banking required reserve ratio. U.S. stocks surged more than 1% on Thursday with the strong debut by General Motors stock. But by the time we concluded the week we were nearly unchanged from last Friday.

The euro zone debt problems never seem to disappear. On Thursday, Dublin sent signals that Ireland is open to discussions on accepting aid from the IMF and European Central Bank. Seeking aid from outside sources is seen as Ireland acknowledging their banking sector needs a good deal of help to shore it up.

China increased their reserve ratio requirement by half a percentage point. The banking requirement raises the reserve that banks must keep in their vault. The action is intended to cool down an economy and keep inflation in check. It is the fifth time this year that China has increased the reserve ratio.

Friday's close saw the dollar weaken against the euro and yen, but gain against the British pound.

Stocks Close Out a Poor Week

2010-11-12T19:11:00.002-05:00

Stocks continued their sell-off Friday. The Dow fell 91 points, the S&P500 closed off 14 points, and the Nasdaq shed 37 points. The mostly down week resulted in all three major indexes logging their worst week in nearly three months.

Worries about the global economy put investors in a sour mood. Around the globe, the economic news was not good: once again, sovereign debt issues in the euro zone have surfaced. Also, there are strong signals China may soon begin a tightening of their monetary policy to deal with growing inflation. Asian markets ended the day sharply lower as analysts see interest rate hikes climbing soon in China. Even the news from the G20 summit in Seoul was disappointing - the summit came to an end without any comprehensive plan to deal with international economic woes.

On the domestic front, The University of Michigan index of consumer confidence reported a reading of 69.3 - the reading was higher than economists had been expecting.

In currencies and commodities, the dollar weakened against the yen, British pound, and the euro. Currencies were the central target of heated debate at the G20 summit. The majority of our trading partners are upset at what they see as Washington's purposeful weakening of the dollar. A statement issued at the close of the summit called for nations to, "refrain from competitive devaluation of currencies."

Crude oil prices plunged on Friday. The price of a barrel of oil fell $2.93 to finish the day at $84.88. Gold prices also tumbled. The price of gold dropped $37.80 an ounce to end the trading session at $1,365.50.

Stocks End Week at Two-year High

2010-11-06T11:08:00.002-04:00

All three major indexes finished the week at a two-year high. The Dow and S&P 500 closed on Friday after posting their biggest weekly gains in more than two months. Stocks held a major rally on Thursday after the Fed announcement that they are prepared to pump another $600 billion into the economy in hopes of stimulating growth.

In addition to the Fed announcement, investors welcomed the results of Tuesday's midterm elections. Wall Street is anticipating the Republican take over of congress will result in more clarity from Washington regarding economic policy.

At Friday's close, the Dow stood at 11,444 - its highest close since Sept. of 2008. The Nasdaq was at 2,579, the highest since Jan. of 2008 and the S&P 500 finished at 1,226, its best since Sept. of 2008.

October's job report was much better than analysts had been expecting. The report showed the economy added 151,000 jobs last month but even that positive number couldn't budge the official unemployment rate from its 9.6% level.

Commodity prices continue to climb as worries about the weakening dollar continue to mount. The new round of quantitative easing by the Fed and the corresponding possibility of currency fluctuations have driven the price of crude oil to nearly $87 a barrel and gold is now flirting with $1,400 an ounce. Global investors are showing increased concerns about how other nations will react to the weakening dollar.

Stocks Show Best October Since 2006

2010-10-31T01:17:00.002-04:00

Markets had their best October since 2006. The S&P 500 gained 4% this past month, with the Dow showing a 3% rise and the Nasdaq jumping 6%. The month ended on a quiet note as traders appear to be waiting for next week's events to unfold before making a move. Next week's election results and Wednesday's Federal Reserve meeting are highly anticipated events and investors will probably be subdued until late in the week.

A mixed bag of economic news on Friday led to a lackluster day on Wall Street. The first data on the GDP for the third quarter showed the economy growing at a sluggish pace of 2% on an annual basis. While the data was near expectations, it was a reminder of the snail-like recovery the U.S. economy is mired in. The Chicago PMI, a measure of manufacturing activity, rose a little bit higher than expected by economists, but the reading on consumer sentiment fell. Economists had predicted the data would show a mild increase but the measurement fell below the previous month's sentiment.

Once again, markets will probably be on hold early in the coming week as investors wait in the wings for major events to unfold. There could be large moves in the market latter in the week as the election and Fed meeting have the capacity to show a possible major shift in the economy and investing possibilities. This coming week offers a glimpse into what direction the market will move in the month's ahead.

Earnings and Economic Data Will Direct Market

2010-10-25T02:33:00.002-04:00

Friday saw stocks closed mixed for the day but up again for the week with the Dow and the S&P 500 gaining 0.6% and the Nasdaq up 0.4%. While domestic earnings have been strong, there is the continuing concern about currency tensions.

The upcoming week will see a rash of economic reports being issued: The National Association of Realtors will be releasing its September's report of existing home sales - analysts are looking for a slight increase in sales over August. Tuesday the Conference Board will issue its reading on consumer confidence for October. Wednesday brings the Commerce Dept. report on durable goods orders and also data on new home sales. Thursday is the release of the weekly jobs report and most predictions call for the numbers to be flat - with not much change in either direction. Friday we see the first reading on GDP for the third quarter. According to a survey of economists, we can expect the reading to be an annualized rate of 2%.

In addition to the economic reports for the week, traders will be keeping an eye on the global currency markets. Tensions remain high as nations position themselves to act and react to global currency fluctuations.

Second Week in a Row Stocks Post Gains

2010-10-16T15:20:00.002-04:00

Despite Friday's weakness, stocks finished their second week in a row showing a gain. The Dow fell 32 points on Friday as the banking sector dragged down the overall market. The banking sector was rocked by the recent foreclosure mess with state and federal authorities threatening to take action. Many banks have halted foreclosures until the issue regarding documentation can be examined or amended. Investors are unsure of the impact that halting foreclosures will have on the bank's bottom line.

It was a week of mixed economic news. Retail sales showed a better than expected gain of 0.6% for September. Consumer sentiment slipped down from 68.9 to 67.9 as reported by the University of Michigan. And while CPI showed no real sign of inflation, the U.S. trade deficit ballooned to $1.3 trillion for fiscal year 2010.

Gold and other commodities continue to surge as the dollar continues to weaken against most other currencies. It now appears certain that the Fed has decided on another round of quantitative easing in an attempt to aid the struggling economy and ease the high unemployment rate. Analysts look to the next Fed meeting in early November for the official announcement. The only question remaining is how much money the program will involve.

Looking ahead, investors will focus this coming week on 7 blue-chip Dow companies as they report earnings. Also, traders will be watching the next round of economic reports due out during the week: housing starts, building permits, industrial production and utilization of capacity.

Choppy Session on Wall Street

2010-10-07T00:43:00.002-04:00

Wednesday' choppy session came to a close with mixed results. The Dow ended slightly higher while the S&P 500 and Nasdaq slumped. All three indexes end strongly on Tuesday and finished the day at their highest levels since May.

The enthusiasm of Tuesday faded early Wednesday morning with the release of the ADP payroll report. While analysts had been expecting the survey to show a gain of 18,000 jobs for the month - the data reported a loss of 39,000 private sector jobs in September. The dour report put traders in a bearish mood for much of the day.

The ADP is used as an early barometer of the government jobs report due out Friday. Most analysts and economists are looking for the jobs number to remain flat, and at the same time they expect the unemployment rate to tick up from 9.6% to 9.7%.

Corporate earnings season kicks off Thursday afternoon when Alcoa reports its most recent earnings results and outlook. There are expectations that healthy earnings may offset possible bad news on the monthly jobs report.

The dollar slipped further. At the end of Wednesday session, the dollar lost against the euro, yen and pound.

Gold continues to climb. Gold futures for December delivery were up $7.40 an ounce and closed at $1,347.70 after hitting a fresh intraday record of $1,351.00.

Oil, like the entire basket of commodities, continues to rise. Crude prices climbed 41 cents on Wednesday to settle at $83.23 a barrel.

Stocks Flat As Caution Dominates

2010-09-29T16:51:00.002-04:00

Stocks ended slightly lower on Wednesday after a day of choppy trading. Investors have been acting cautious as an uneasiness has been hanging over the market for most of the week. Analysts point to the midterm elections and the lack of a specific tax policy as the cause for the nervous tone on Wall Street. Markets hate uncertainty, and there is a sea of uncertainty being provided by Washington. Small businesses and individuals have no idea of what to expect in the future tax code - and that is keeping the market frozen.

Stocks rallied to a 4-month high last week, but have been stuck in a rut this week. The economic news has been limited - consumer confidence fell to a level not seen since February and there are continuing reports highlighting the weakness in European markets. Moody's downgraded the Anglo Irish bank and other banking reports see a need for additional capital at Allied Irish Bank. Also, on Wednesday, Spain was hit with massive strikes as workers took to the streets to protest the government's austerity program.

The Dow slipped 23 points on Wednesday and both the S&P500 and Nasdaq lost 3 points. Gold, acting on the uncertain health of the euro zone, hit a new high of $1310.30 an ounce. Crude oil closed a $1.68 higher at $77.86 a barrel.

Stocks Slide On Lackluster Economic Data

2010-09-24T01:43:00.002-04:00

This week has been marked by low volume and mixed economic news. The Dow fell 77 points on Thursday - mostly fed by the continued uncertainty in the U.S. labor market and rumors of possible problems brewing with certain Irish banks. The market rallied midday on a better than expected report on the housing market, but faltered late in the day.

Markets will probably remain choppy as investors digest each piece of economic data in an attempt to get a better handle on the strength of this rather anemic recovery.

The weekly jobs report came in worse than expected. First time claims climbed by 12,000 while economists were predicting a drop of 3,000 to 5,000. Unemployment remains very high and many economists see the the jobless problem as the central reason why the recovery is so poor - consumers just will not begin spending freely when surrounded by a near 10% unemployment rate. The consumer still fears for his/her own job.

Oil prices have remained stable, with prices holding close to $75.00 a barrel. Gold prices continue to climb and act as a signal to the level of uncertainty many investors still feel.

So far this year, the S&P is up nearly 1%, while the Dow and Nasdaq are more than 2% higher.

Investors Like What They Hear

2010-09-13T23:17:00.002-04:00

Stocks rose on Monday as investors were happy with world developments. Wall Street was glad to hear the new bank reform plan hatched in Basel, Switzerland will allow banks until 2019 to increase their core capital cushions to 4.5% from the current 2%. It was believed earlier that the banks would be forced to act on a much shorter timeline. The other good news on Monday was upbeat economic data from China. The central point in the data was China reported stronger than expected industrial sector growth in August.

The Dow Jones industrial average was up 0.8% to close at 10,544.13. The Nasdaq finished the day up 1.9% at 2,285.71, and the S&P 500 closed at 1,121.90 - a gain of 1.1%.

The remainder of the week will be driven by several economic reports. Also, markets may show some movement as lawmakers report back to work and begin to tackle the issue of what to do about the Bush tax cuts.

The dollar fell on Monday against the British pound, yen and euro.

Crude oil prices climbed 74 cents to close at $77.19 a barrel and gold gained 60 cents to finish at $1,247.10 an ounce.

European Bank Jitters

2010-09-08T00:52:00.002-04:00

U.S. stocks fell on Tuesday as worries surfaced once again about the health of many European banks. Investors became spooked after a series of reports raised questions about capital levels in certain European banks and their exposure to bonds issued by the usual suspects - Portugal, Italy, Ireland, Greece, and Spain.

All three indexes fell on Tuesday. The Dow fell 107 points, the Nasdaq slipped 25 points, and the S&P 500 lost 13 points. Tuesday's drop put the Dow back into the red for 2010. Last week's strong rally had the Dow turn positive for the year.

The worry regarding the strength of certain European banks drove investors to such safe haven assets such as gold, Treasury's, and the dollar. Gold finished the day gaining about $7.00 an ounce to close at $1258.

Markets, in a more stable environment, wouldn't be moved by Tuesday's European bank reports, but investors still feel a great deal of anxiety about the overall health of the economy. The debate regarding the strength of the U.S. economy continues. Until more data becomes available, investors remain edgy and any bad economic news will result in large market swings.

Markets Sway With Economic Data

2010-08-31T23:42:00.002-04:00

Markets have been moving up and down recently on economic data .... and the trend will continue throughout this week. Investor fear appears to be growing, and until there is some solid data showing the U.S. economy is not weakening - the bears will continue to run.

The excitement about strong Q2 corporate earnings we saw earlier in the summer is fading. Most investors are now focused on the economy, and they don't like some of the numbers they see. Last week's home sales report showing a sharp plunge in sales when coupled with the GDP being revised lower has made investors cautious.

The following data will probably be the main market movers for the week ahead:

Wednesday will see the payroll processing firm ADP's employment results. Labor analysts are expecting private sector employers to have added somewhere between 13,000 to 30,000 jobs in August .... a drop from 42,000 in July. Auto and truck sales will also be released throughout the day on Wednesday.

Thursday, the Dept. of Labor will release the weekly jobs report, pending home sales, and factory orders.

The widely anticipated monthly jobs report is due on Friday. A majority of economists surveyed expect to see the unemployment rate tick up from 9.5% to 9.6%. This is the report most investors are waiting on to determine whether or not the broader economy is weakening or if the tepid recovery is moving forward.

Markets will certainly move up or down depending on the strength of these economic reports.

The largest

Economic Reports Drag Down Markets

2010-08-21T02:32:00.003-04:00

Stocks closed lower on Friday as investors continued to react to downbeat economic reports. It was the second straight weak of losses for both the Dow Jones and S&P 500.Fear dominated the market all day Thursday and continued into Friday.

Investors are growing fearful that the weak recovery is running out of gas and may even signal a double-dip recession. Confidence was hammered on Thursday as three key economic reports shook investors.

Weekly jobless claims came in at their highest level since November. The Philadelphia region reported manufacturing activity was slowing, and a key measure of future economic activity was less than Wall Street was expecting. Investors are growing edgy over the direction of the economy. More and more indicators are pointing to a weakening of the overall economy. The job market remains dismal and the housing sector continues to struggle. The good news about the expansion of corporate America is being overshadowed by bleak economic reports and indicators.

Going forward, markets will continue to be dominated by economic news. The uncertainty regarding whether or not we are in the midst of a double-dip recession or just anemic growth is academic at best. Investors will remain bearish until they see some indicator to act more optimistic.

Jobless Claims, Cisco Systems, Add To Downturn

2010-08-12T16:48:00.003-04:00

It's been a tough week on Wall Street. The Fed's statement on Tuesday was the most bearish outlook in over a year. The level of pessimism amongst investors is growing. More and more now feel certain the anemic recovery is now losing steam and the only point of debate remaining revolves around how meager growth will be going forward.

Thursday was the third straight session of declines. Wednesday saw all three indexes losing more than 2.5% as investors worried the U.S. trade gap widening was an indicator of weak overseas demand for American products. Thursday's 59 point drop in the Dow was fueled by a weak jobs report and poor earnings by Cisco Systems. The latest weekly jobless claims data saw an increase in claims when economists had been expecting a mild drop in numbers. The latest data reports the number of first-time filers for unemployment insurance rose to the highest level since February.

Beyond the jobless numbers, investors were faced with a downbeat report by Cisco for the second quarter. Cisco System's earnings report gave more fuel to the bears that economic weakness is now beginning to chip away at the corporate sector's strength.

Oil prices continued their recent decline as speculators fear a softer global recovery is reducing the demand for oil. Crude oil futures for September fell $2.28 to finish the day at $75.74.

Gold climbed $17.50 an ounce to $,216.70 as investors looked for a safe haven. The closing price of gold was the highest since June.

Jobless Numbers Weigh on Market

2010-08-08T01:35:00.002-04:00

Stocks tumbled on Friday on concerns about unemployment. The Dow fell 160 points in the morning, but recovered much of the loss during the day to finish down 21 points. All three indexes ended up for the week. Both the Dow and the S&P finished the week with a 1.8% gain, and the Nasdaq gained 1.5%.

Better than expected corporate earnings helped push the Dow nearly 7% higher in July, but the most recent snapshot of the U.S. economy shows the recovery may be losing steam. The bulls see it as a "pause" in the recovery, while the bears see the cloudy outlook as worrisome.

Friday's bleak job report gave the bears more fuel for pessimism. While even the bears admit the odds of a double-dip recession are remote, there is a growing belief that future growth is going to be anemic. It is difficult to see how we can have strong earnings going forward without considerable job growth.

What is worrisome to Wall Street watchers is that virtually no one is any longer predicting a strong recovery ......... the only argument seems to be about what needs to be done now. Some economists are calling for further stimulus to spur spending and increase demand, while other economists place the blame on an environment of uncertainty which is making employers hesitant to do any hiring. Most analysts are now watching the Fed closely to see how they respond to this loss of momentum in the economy. The Fed is scheduled to make a policy announcement next week and investors will be looking to see if the Fed has any new plans on how to get the economy moving forward.

Fear Dampens Optimism

2010-07-28T01:37:00.002-04:00

Despite healthy profits across a wide spectrum of companies for the second quarter, there remains a great deal of fear and anxiety acting as a drag on the economy. Businesses are sitting on nearly a record high $1trillion pile of cash and yet remain reluctant to add jobs or make large investments. Consumers are still worried about lack of job growth and anemic income growth.

It is not that there is a great deal of bad economic news that is affecting markets as it is the tremendous amount of uncertainty, or as Fed boss Bernanke referred to as "unusual uncertainty." Companies and consumers don't see a clear path of where the economy is heading and hence the fear level is elevated.

Businesses are nervous about debt problems in Europe, a possible slowdown in China, deflation pressuring prices downward, the implications from the new health care and financial services reform, and future tax rates on income, dividends, and capital gains.

The anxiety level is high for the typical American as reflected in the latest consumer confidence data. The consumer sees continued high unemployment, record high foreclosures, and now a wave of layoffs at the state and local level which all data indicates will soar as tax revenues remain depressed.

All of this uncertainty at so many levels of the economy is acting as an anchor on slowing the recovery which most indicators seem to signal should be a stronger rebound. It would help greatly if American business and the American consumer could see a clear path to follow.

Market Falls on Economic Outlook

2010-07-17T11:00:00.002-04:00

The Dow Jones industrial average fell 261 points (2.5%) on Friday. The S&P 500 retreated 32 points or 2.9%, and the Nasdaq dropped 70 points (3.1%). Friday's losses wiped out a week of solid earnings.

The market tumbled sharply upon the release of the latest consumer sentiment index from the University of Michigan which showed consumers soured on the economy. The drop in the index was far greater than analysts had been expecting. The other bad news was on the earnings front - Bank of America and Citigroup reported lower revenue than a year ago and GE reported earnings that were less than what Wall Street had anticipated.

There remains a great deal of anxiety about how well the U.S. economy will perform going forward. Many Wall Street analysts appear to be watching what companies are saying about the second half of 2010 and 2011 more than what their earnings were in Q2 2010. With the end of government stimulus programs and planned tax increases in 2011, there is a growing cloud of doubt about the strength of the future economy. The consensus is that we will see slower growth ......... but how slow is what the bears and bulls are now fighting over.

It is important to remember that Wall Street is always pricing equities based on expectations going forward about six months into the future. Much of the volatility we see in today's market is really a push and pull regarding how the year 2011 is shaping up to be. There is a great deal of fear and uncertainty which is building about how all the current events in Washington will impact the financial world in 2011.

This coming week on Wall Street will probably be dominated by earnings news. We will see 122 earnings reports, including a dozen Dow components. And while we expect most to show good earnings - don't be surprised if the market moves more on how these companies see the future than on what they earned in the past.

Dow Has Best Week in Nearly a Year

2010-07-10T10:36:00.002-04:00

Stocks climbed again on Friday, culminating in the best week the Dow has seen in nearly a year. After Friday's 51 point gain, the DJIA closed up 5.3% for the week - the best performing week since July of 2009. The week was badly needed. The gains came after a bruising conclusion to the second quarter which saw the Dow falling 10% and the S&P 500 drop 12%.

Analysts see the rally as a belief that markets oversold in June on fears of a double-dip recession in the U.S. and too much pessimism regarding the stress tests of European banks.

The driving force behind the week's optimism was the early data indicating second quarter earnings are going to be strong. The official start of the reporting season is Monday.

Stocks Slip To New 2010 Lows

2010-07-02T23:46:00.002-04:00

Stocks finished a tough week with the major indexes at new lows for 2010. The stock market limped into the third quarter weakened and battered by a string of downbeat economic reports.

Friday's jobs report was weaker than expected. The level of uncertainty investors are feeling about the economy is growing. Many economists are beginning to downgrade their growth forecasts to more sluggish levels for late 2010 into 2011. The "uber bears" are talking more and more about a double-dip recession.

The European debt crisis pulled down investor confidence starting in April and then we had the oil mess in the Gulf which further weighed on the market. The past few weeks have been full of economic reports which indicate the recovery is eroding .... poor jobs numbers, industrial indicators slipping, consumer confidence falling, and the bottom falling out of the housing market.

The uncertainty is huge. Slow growth and no jobs is not a recipe for confidence. Whether or not the correction in the market is justified or overblown will not be known for weeks and weeks. Caution is probably the best strategy at this time.

Markets will be closed on Monday for Independence Day. The next round of data which analysts will be watching carefully will be Tuesday's non-manufacturing ISM and Thursday's retailers monthly sales report. For the time being, there will be an ongoing debate about how much the economy is slowing and there will be much chatter regarding a possible double-dip recession every time a new batch of data is released.

Keep in mind when listening to all the expert analysis - the only thing that is certain is that there is a great deal of uncertainty in the market right now.

Soft Data Pressures Markets

2010-06-27T14:27:00.002-04:00

Markets have been trending downward on disappointing data regarding the strength of the overall economy. Weak retail sales and weak projections from retailers mixed with very weak numbers from Realtors has many analysts worried about future growth forecasts.

The Commerce Department reported May construction was down 17.2% for an annual rate of 468,000 units - the lowest level in a year. Building permits fell sharply ..... which means builders do not plan on much future activity. New home sales plunged 32.7% in May, and while analysts had expected some drop-off due to the expiration of the new home buyer's tax credit, the drastic fall in sales was much worse than anticipated. All of this sobering data is occurring in a time of record low mortgage rates, but many consumers find themselves lacking any equity in their existing home, a soft job market, tight lending standards from banks ....... so no matter how attractive the mortgage rates are, prospective home buyers just can not take advantage of them.

Other factors weighing on the market are reports which show European growth expectations will be downgraded as the euro zone moves to implement austerity programs, and the U.S. first quarter GDP was revised downward.

This week's data, the final for Q2 2010, will be dominated by the end of the month employment numbers. As has been the trend, this report will probably dictate how good or bad the market performs this week.

Markets Show Slight Gain On Mixed Reports

2010-06-18T02:44:00.002-04:00

Stocks finished higher on Thursday despite poor data on jobs and manufacturing. The number of workers filing new claims for unemployment rose last week to 472,000 from 460,000 the previous week - analysts had expected a drop of 10,000. Continuing claims also rose from the previous week. The Philadelphia Fed index, a regional measure of manufacturing, showed activity slowed in the latest results.

Investors looked past the dour domestic reports and appeared to focus on news out of Europe instead ....... the latest Spanish bond auction was very solid. The bond sale helped ease worries that Spain's fiscal woes may be as bad as that of Greece. Concerns that the European debt crisis could send the U.S. back into another recession have been a drag on markets for the past two months.

The turmoil and fallout from the BP oil spill continued to weigh on markets. Beyond canceling their quarterly dividend, questions about BP's long term health remain.

Gold prices soared $18.20 an ounce on Thursday to settle at $1,248.70 ..... an all-time high. Light crude prices fell $1.10 a barrel and finished the day at $76.57 a barrel.

Stocks Fall On Concerns About BP

2010-06-10T03:51:00.002-04:00

Wednesday's early stock rally ended as worries grew that BP may not be able to survive the Gulf oil spill. The Dow Jones ended the day down nearly 41 points after an early surge had pushed the market over the 10,000 level for the first time this week. Investors fear BP may not be able to sustain the ongoing liabilities and lawsuits that are mounting from the oil leak. BP's stock tumbled more than 16% by the close on Wednesday and energy stocks overall faltered.

The recent volatility in the markets has investors on edge and uncomfortable. Market gyrations have created an environment where investors seemed to be swayed by the latest news cycle. Wednesday morning, stocks climbed nicely on news from Fed boss Bernanke that he didn't think the European debt crisis would derail a recovery in the U.S. - but as soon as some analysts said they were unsure if BP would be able to pay out dividends due to the oil spill ........ investors fled.

The Fed's latest "Beige Book" reported economic activity continued to improve in May, but many districts showed only very modest growth.

The euro continued to show some stability against the dollar on Wednesday.

Oil prices continued their recent uptick and closed the day at $74.38 a barrel.

Gold prices fell over $15 an ounce on Wednesday after hitting a record high on Tuesday and closed at $1,228.50 an ounce.

Choppy Sessions on Wall Street

2010-06-04T03:29:00.002-04:00

Markets continue to be dominated by headline news. For the better part of the past month the stock market has been driven in its daily swings by news of the European debt crisis, and this past week has seen a great deal of movement spurred on by events in the Gulf of Mexico. Energy shares bounce up and down on the latest news regarding the Deepwater Horizon rig and the efforts to cap the leak. Earlier in the week we saw a big move in the overall market driven by a DOJ announcement of a possible criminal investigation into BP, and also the news of further erosion in relations between North and South Korea. The point is - the real economic data has been lost to the headline news cycle.

Friday's market will probably be nearly fully dependent on the monthly jobs report. The early indications are mixed. There will be a surge in the overall number of jobs due to the Census hiring, but forecasts are mixed on how well the private sector will behave. The most recent data shows the number of new unemployment claims continues to drop, but the continuing claims are up slightly. Analysts are expecting a total of 500,000 jobs to be added for the month and for the overall unemployment rate to fall from 9.9% to 9.8%.

The euro inched lower on Thursday after hitting a four year low of $1.2111 on Tuesday. Many currency watchers expect a slow downward grind for the euro and a further erosion in its value of about 10%.

Oil prices rebounded before the closing bell on Thursday and finished the day with a gain of $1.75 at $74.61. Gold fell over $12.00 an ounce and ended at $1,210 for the day.

All eyes will be focused on Friday's job report and the latest effort to stop the BP oil leak.

Dow Falls Below 10,000

2010-05-27T00:24:00.002-04:00

The Dow Jones industrial average tumbled nearly 70 points on Wednesday - sending the Dow to its lowest level since February 8, 2010. All three major indexes have now lost more than 10% off their highs.

Worries about Europe's growing debt crisis and its impact on U.S. and global economic growth continue to drag down markets. The most recent round of anxiety was triggered by news that Spain's central bank had to take over one of the nation's oldest savings bank. Investors saw the weekend event as possible evidence that the contagion from debt-ridden Greece was now moving to Spain.

Adding to investor's worry was the war of words brewing between North and South Korea.

The market began the day on Wednesday by moving higher on a strong housing market and a better than expected durable goods orders, but by afternoon the euro began to slide and the market once again headed south. The euro has been seesawing since hitting a four-year low last week of $1.2146.

Predicting how the crisis in Europe will move foreword is a rough call. As one economist said, it is not a matter of economic models or fiscal responsibility ...... it is a concoction of economics mixed with national politics, global markets, and populist demands.

Crude oil moved higher on Wednesday. The price of a barrel of oil finished $2.76 higher at $71.51.

Gold pushed back to over $1200 an ounce on Wednesday. It settled at $1,213.40 after moving up $15.40.

Euro Fears Translate Into U.S. Weakness

2010-05-20T16:04:00.002-04:00

Investors have started to believe that austerity measures in Europe will cause an economic contraction in that region and may precipitate a slow-down in North America and the Asia Pacific region. Collapsing commodity prices reinforce the fear that the global economy may disappoint in the coming quarters. To adjust to this new environment portfolios should reduce foreign stock holdings, short the euro and increase the allocation to long-term U.S. treasuries.

Stocks Fall As Euro Tumbles

2010-05-18T22:52:00.002-04:00

Stocks continued to struggle in face of the European debt crisis. Stocks fell once again on Tuesday as the euro tumbled downward to a fresh four year low against the dollar. The Dow lost 115 points, the S&P 500 was down 16 points, and the Nasdaq was the biggest loser of the day finishing with a loss of 37 points.

The domestic business news was mostly positive with both Home Depot and Wal Mart reporting better-than-expected earnings and the latest housing numbers were mixed - while housing starts rose 5.8% in April, building permits (a measure of future builder confidence) fell 11.5%.

But regardless of domestic news, most investors were focusing on Europe. The euro issue has many investors on edge and worried that it is the start of something bigger which could derail the U.S. recovery. While analysts don't seem to be concerned that the euro could drive the U.S. economy into a second recession ........ they do worry that if it spreads, it could weaken our recovery, hurt exports, and impact corporate profits. Adding to investor's anxiety is the worry that many of the Euro zone nations are carrying much more debt than is publicly stated and also a growing sense that the required austerity plans are so severe many nations will reject them.

Commodities prices fell on Tuesday - gold finished the day down $13.50 and oil continued to slide and ended the day below $70 a barrel at $69.41.

Europe's Debt Crisis

2010-05-14T09:26:00.002-04:00

Markets finished down Thursday as once again concerns about the debt crisis in Europe has investors on edge. Early in the week worries eased as optimism regarding the $1 trillion European bailout increased, but it now appears a certain level of anxiety lingers on investors.

The Dow finished down 114 points on Thursday, and the S&P 500 ended down 14 points. Stocks were adrift most of the day but turned downward near closing.

The latest employment numbers for new claims showed a slight drop. While it was the fourth straight week of declining numbers, most analysts see the numbers as rather anemic and not indicative of real job growth. Continuing claims rose again, and some labor watchers say this stubborn number does in fact indicate there are a good segment of lost jobs that are not going to return even when the economy improves.

The dollar continued to gain strength against both the euro and the yen. As of Friday morning, the euro continues to fall. It is now at a 14-month low versus the dollar. The slide in crude oil prices continued as the news of the European crisis drove oil down to below $75 a barrel. Gold once again gained strength as investors fled to the safe haven on worries about currencies. Gold moved to record highs on Wednesday and closed at $1243.10.

Gut Wrenching Day on Wall Street

2010-05-07T02:43:00.001-04:00

Thursday was a wild ride on Wall Street. While markets were already jittery about the European debt problem and the Dow was down hundreds of points, some type of technological trading glitch caused the market to plunge nearly a thousand points in a matter of moments.

As of Thursday night, no one seems sure of exactly what happened to cause the largest intraday plunge ever recorded, but the episode is a good gauge of just how much anxiety there is on Wall Street regarding the global economy. Investors are on edge regarding events in Greece. There are so many moving parts to the puzzle it is difficult to judge how it will all play out. Hopefully, markets calm down on Friday if Germany votes to support the Greek aid package. But even if the other members of the EU and the IMF put together the $146 billion dollar bailout package, it will not be the end of the story. There is great concern that the Greek populace will not support the dire austerity program required to repair their balance sheet and there is a growing fear that other members of the EU may require a bailout much like the Greek government.

General strikes are already planned for all of next week across Greece as unions mobilize to oppose the austerity plan. Some leading economists are beginning to voice opinions that eventually Greece will have to abandon the euro ......... a move that will roil world markets and cause a run on Greek banks. The economists claim that the debt crisis in Europe has exposed the fatal flaw in the euro - poorer nation members of the EU have no mechanism to inflate their money supply, devalue their currency, and are left with no option except dire cuts in spending and tax increases ... and these solutions are not politically possible.

The euro fell to its lowest level in more than a year on Thursday and many analysts look for the fall to continue until the crisis ends. Oil continued its slide and settled at closing at $77.11 a barrel. Gold soared $22.30, spiked at over $1200 mid-day, and finished the day at $1197.30.

Investors will be watching the April's job report on Friday morning. Most analysts expect the numbers to show the employment picture is improving slowly, but events in Europe will probably overshadow any domestic news and drive stock prices.

Dow Back Above 11,000

2010-04-29T03:07:00.002-04:00

The Dow gained 53 points on Wednesday to move above 11,000 after a plunge of 213 points on Tuesday. Wednesday's gain was centered on news from the Federal Reserve that economic activity was picking up and that rates would remain low for the immediate future. The other good news was the continuing stream of quarterly earnings that beat estimates - nearly 82% have come in above expectations.

Wednesday's rebound followed a dreadful Tuesday on Wall Street .... the 213 point drop was the biggest one day drop since July 15, 2009, when it lost 257 points.

The euro zone debt crisis continues to roil investors. Tuesday's announcement by the ratings agency Standard & Poor's to cut Greece and Portugal's ratings sent the market lower. Standard & Poor's lower rating on Greece's long-term debt status to BB+ is in effect an announcement that the agency now considers these bonds to be speculative or "junk".

Investors don't like uncertainty and at the present time it is uncertain how deep and wide the debt crisis will spread across Europe. It now appears Greece's debt problem is much larger than previously believed and analysts are also worried that Spain's situation is worse than earlier predicted.

The euro fell to a new low for the year this week. The falling euro will impact American exports as the dollar gains strength and makes our economic recovery that much more difficult.

As we stated earlier in our newsletter - don't look for a quick solution to the euro zone or global debt problem. Nation's make promises when they are seeking bailouts, but many governments will have difficulty enforcing austerity programs as political forces rise up in opposition to the needed painful agenda. Germany will probably come to the rescue of Greece some time soon, but if other euro zone nations begin to fail ...... Germany's patience will be tested.

Stocks Move Upward on Earnings Reports

2010-04-22T00:58:00.002-04:00

Stocks moved higher as numerous earnings reports beat Wall Street expectations. AT&T, Boeing, McDonalds, and United Technologies all beat estimates. The financial sector, including Morgan Stanley and Wells Fargo moved higher as strong earnings pushed the sector up sharply.

The widespread gains in earnings were additional proof to many investors that the economy is in a recovery process, but many still warn it's going to be a slow one.

As the week comes to an end, market watchers will move their focus from corporate earnings to the job market and housing. The job picture is still unclear. Employment has increased mildly, but is still seen as anemic. Many analysts are fretting, the past couple weeks have actually shown the employment picture as worsening, and are hopeful this week's report shows a turn around in the current trend. The housing sector will be watched closely for the next couple months to see how it reacts to the termination of government programs which have been crafted to help ease the downfall.

Crude oil prices ended their slide downward after pushing toward $90 a barrel earlier this week. Oil finished Wednesday at $83.68 a barrel, up 17 cents. Gold moved upward $9.60 an ounce to close at $1148.20.

Stocks Pass Major Milestones

2010-04-15T01:48:00.002-04:00

Markets passed new milestones after strong quarterly results from both JP Morgan Chase, Intel, and early retail sales numbers. The S&P 500 index gained 13 points, or 1.1% to close at 1,210.65 - its highest mark since September 2008. The Nasdaq composite gained nearly 39 points to finish the day at 2,504.86. Year to date the Dow is up 6.7%, the S&P 8.6%, and the Nasdaq 10.4%.

JP Morgan Chase reported a $3.3. billion profit for its first quarter. Shares of the stock gained more than 4%. Analysts are hopeful most of the big banks follow the lead of JP Morgan and post a profitable quarter.

Chip maker Intel reported earnings that were better than what Wall Street had been expecting, and the latest retail sales figures were stronger than predicted. Retail sales jumper 1.6% in March.

Analysts are hopeful the continuing good news on the retail front is proof that the consumer is beginning to feel more confident and will start spending more.

The dollar fell against all its major rivals - the yen, the euro, and the pound. The weaker dollar lifted the price of commodities ............. crude oil ended its five day slide and closed at $85.84, a gain of $1.79. Gold climbed $6.20 and finished Wednesday at $1,159.60.

Retail Sales Lift Market

2010-04-09T01:35:00.003-04:00

The market closed higher on Thursday with an upbeat retail sales report which showed consumers are shopping again. The good retail news took the edge off the bad news out of Europe that Greece appears to be closer than ever to a possible default, and the latest weekly jobs report which was much weaker than had been anticipated.

The retail metric known as same-store sales, rose over 9% in March when compared to March of 2009. Most analysts had expected a gain of near 6.5%.

The S&P500, Nasdaq, and Dow have now risen in 6 of the last 7 weeks as investors continue to feel confident that with low interest rates, signs of an uptick in the economy, and even limited improvement in the jobless situation - stocks will continue to climb.

The uncertainty over Greece's balance sheet has once again cast a dark shadow over the European markets. More and more analysts feel Greece will be unable to climb out of its current situation without roiling global markets ...... either through a default or causing a major rift which will impact the euro harshly.

Gold was nearly unchanged on Thursday after a steep rise on Wednesday. Gold closed down 10 cents on Thursday at $1,152.90.

Oil, seeking a price level many analysts feel will be between $85 - $92 a barrel, fell from its higher levels earlier this week to finish Thursday down 46 cents at $85.39.

Stocks End Quarter Higher, But Lower On Last Day

2010-03-31T18:32:00.002-04:00

Stocks finished the first quarter on a sour note as a disappointing manufacturing and jobs report drove the market down. The first quarter saw a solid gain as the Dow Jones finished at 10,857, which represents a 4.1% gain. The S&P500 ended the first three months of 2010 with a 4.9% gain and the Nasdaq had the strongest performance of the major indexes with a quarterly showing of 5.7%.

Wednesday's downturn was centered on the ADP report which showed private-sector employers shed 23,000 jobs in March. The report was in sharp contrast to the 40,000 jobs gain which analysts had been expecting. Friday's Labor Dept. report is expected to show a sharp gain in employment, but analysts are unsure of how the market will react on Monday as most of the jobs increase is expected to be due to hiring temp workers for the census.

Also driving the market down on Wednesday was the Chicago PMI. The index slipped to 56.8 in March, down from 62.6 the previous month.

The dollar weakened against the euro and British pound, but was higher against the yen.

Crude oil continued its climb and finished $1.39 higher to finish the day at $83.76 a barrel. The weak dollar drove gold prices upward and finished up at $1,116.10 an ounce.

Stocks Slip On European Fiscal Crisis

2010-03-25T00:27:00.003-04:00

Stocks closed lower Wednesday as the dollar gained strength on news of more sovereign debt issues in the EU. Also, the latest data regarding new U.S. home sales put Wall Street in a dour mood, as many investors worried about the overall strength of the economic recovery.

The rating agency Fitch cut Portugal's sovereign credit rating one notch to "AA minus" citing the nation's debt load and growing budget deficit. The report specifically noted Portugal's structural weaknesses amid a struggling global economy. An analyst at UBS added to the euro's woes by saying, "Greece will default at some point on its bonds." The grim news about elevated sovereign debt levels and possible defaults sent the euro to a new 10 month low with the euro slipping to under $1.34 exchange rate late Wednesday afternoon.

Stocks were also pressured by a weaker than expected report on new home sales which showed sales fell 2.2%. The report came just one day after a report showed existing home sales fell in February.

The strong dollar surged against not only the euro, but also against the yen and the pound. Gold prices plummeted nearly $15.00 an ounce to finish the day at $1,088.80 an ounce. A larger than expected build in supplies drove down crude prices, with oil closing at $80.61 a barrel.

Stocks Hit an 18-month High

2010-03-18T00:38:00.002-04:00

Stocks continued to rally on Wednesday - the Dow, S&P500, and Nasdaq all closed at new 2010 highs. Stocks have been moving higher steadily over the last few weeks. The S&P500 has finished higher 14 of the last 15 sessions.

The market gained Tuesday after the Federal Reserve opted to hold interest rates steady. The Fed, as expected, said rates should stay near zero percent for the foreseeable future as they see stability in the economy, but they also caution the recovery is going to be moderate. Standard and Poor's rating agency affirmed Greece's credit rating of BBB+ which soothed fears that the euro zone nation could default. Both of these announcements contributed to a weakening dollar. The U.S. dollar has now weakened to the point the Canadian dollar is approaching parity with it. The Canadian dollar is at its strongest level in almost 2 years.

The weak dollar drove commodity prices higher. Crude oil inched close to $83 a barrel before settling in to close at $82.93. Gold rose $1.70 to finish the day at $1,124.20 an ounce.

Stocks Continue To Gain

2010-03-11T01:35:00.002-05:00

A recent string of modest gains has resulted in the Nasdaq moving to its highest level in more than 18 months. The Dow rose 3 points on Wednesday to close at 10,567 and the S&P500 finished at 1,145.

The economy continues to show signs of a slow recovery as consumer spending edges a bit higher and the wholesale numbers show improvement. The latest state employment numbers were a mixed bag - fewer states reported increases in unemployment, but analysts are still worried about how few new jobs are being created. Wall Street is expecting a surge in hiring in March as the economy improves, warmer weather creates more construction jobs and the government hires hundreds of thousands of temp workers for the Census.

The bears remain on the sidelines awaiting proof that the economic recovery has legs - they cite the weakness in the housing sector, global debt levels, and the impact of China slowing its growth.

Crude oil moved above $83 a barrel before retreating and closing at $82.09. Economists worry about increasing oil prices crimping the recovery. It appears a bit of a catch-22, if the global economy improves then oil prices will climb due to increased demand, but if the price increases past a certain point it hinders the economic recovery in the U.S.

Thursday will see the release of initial claims for unemployment benefits - Wall Street expects claims to rise by 10,000 to a bit over 460,000. Also on Thursday will be the Census Bureau's report on the January trade gap.

Mixed Economic Signals

2010-03-04T04:19:00.002-05:00

The market remains choppy day to day depending on the latest economic news. After stocks drifted higher over the past three days, and into positive territory for 2010, they once again retreated slightly on economic worries.
The situation in Greece has been a drag on the global economy most of the past month. The EU has promised to more closely regulate the economies of its 27 members and Germany seems to be on board with some type of bailout but the jury is still out on whether or not the Greek government has the ability to control and implement a true austerity program.

Domestically, while the economy shows continued improvement, many analysts are still concerned about how anemic the recovery appears to be - manufacturing and overall business conditions are much better than a year ago, but the weakness in the housing market and the level of joblessness worries many investors. Labor analysts look for either this month or next month to bring news of job gains, but in an economy which requires 125,000 jobs a month just to absorb new workers entering the job market - most analysts sadly admit it will take years to get back to some level of full employment.

Currency markets remain volatile due to the uncertainty of the euro and the weakness of the pound. Oil moved back to over $80 a barrel to close at $80.87 and gold climbed $5.90 to finish at $1,143.30 an ounce.

The market, for the remainder of this week, will move on Friday's job report and on any concrete news out of the EU regarding Greece's debt bailout and austerity plans.

Stocks Drop as Confidence Plunges

2010-02-23T19:48:00.003-05:00

Stocks dropped on Tuesday as a key measure of consumer confidence plunged. The Dow lost 100 points, and the S&P500 slipped 13 points.

The drop in consumer confidence as measured by The Conference Board, a private research group, fell to 46.0 in February as compared to 56.5 in January. The data reflects investors' growing pessimism regarding the strength of the economic recovery and the job picture. Analysts said the sour report was rooted in worries about global debt and a growing sense that Washington can not fix the economy anytime soon.

The market turned negative this morning on the news and never did recover through the session. Markets have been choppy for the past week or two as mixed economic news sways the market up and down. The Greek debt crisis has shaken investors on both sides of the Atlantic. China's internal decision making to temper growth by limiting bank loans has added to the volatility. The FDIC published a report on Tuesday that the number of banks on its so called "problem list" has climbed to over 700. The list, a gauge of banks which need watching, is the highest number in over six years.

The dollar once again gained strength against the euro and fell against the yen. The price of crude fell $1.45 to finish the day at $78.85. Gold was off almost ten dollars and ended the day at $1,103.20 an ounce.

Dow Jones - Triple Digit Rally

2010-02-17T01:04:00.002-05:00

The Dow Jones showed a strong gain of nearly 170 points in the first day of trading following the three day weekend for Presidents Day. Stocks climbed on a combination of upbeat earnings and economic reports.

The Empire State index, a gauge of manufacturing activity, rose to 24.91 in February - up from 15.92 in January, and far ahead of analyst's forecasting it would rise to 18.

Markets were optimistic regarding news from the European Union's plan to pressure Greece into getting its debt under control. While details are few, the outline calls for Greece to have a comprehensive plan to cut its sky-high deficit and report back to the EU within 30 days. Debt concerns have hung over European markets all week. Global investors are worried about the extent of the debt and the impact of the bailouts on the EU's larger nations. It remains to be seen what action Germany and France will take toward their poorer partners.

The other good news coming out of the Euro zone was the earnings report from Barclays. European banks have been slower to recover compared to their American counterparts, and the strong earnings report was welcome news to investors.

Gold prices soared on Tuesday, up nearly $30 to close at $1,119.80. While the dollar has recently been viewed as much stronger than the euro ....... many investors are still turning to precious metals as a hedge against all currencies.

Crude oil prices rose sharply to close $2.88 higher at $77.01 a barrel.

Debt Fears Knock Dow below 10,000

2010-02-08T21:45:00.004-05:00

The Dow industrials fell below 10,000 for the first time in three months as sovereign debt fears shook the market. Monday's close of 9908 was the first time since November 4th that we have seen a close under 10,000.

The major indexes have been slipping for the last four weeks as caution has replaced optimism on Wall Street. Profit taking, a long predicted correction, and a series of economic events have spooked investors. The tepid recovery has many analysts hedging that the economy will slip once the federal stimulus is removed - but most economic data doesn't support that bearish view. The slide started with the news regarding China's curbing of bank lending and all the stir in Washington about limiting stock trading at large American banking institutions. Lastly, the European debt woes and chatter about possible sovereign defaults have sapped the confidence of investors.

The recent fear that Greece may default and trigger other European defaults has sent global stocks lower. The Greek government is attempting to convince investors it can restrain its shortfall without outside assistance .... an opinion most analysts don't share.

The real fear with Greece's situation is that Europe is facing a contagion. Spain, Italy, Ireland, and Portugal are all suffering outrageous levels of debt. These debt concerns are battering the euro and driving the dollar higher - which impacts U.S. stocks.

Commodity prices rallied on Monday. Light crude closed 70 cents higher at $71.89 and gold finished the day up $13.40 at $1066.20.

Stocks End Slide

2010-02-01T18:36:00.002-05:00

February kicked-off with a strong gain of 118 points on the Dow Jones. The gain ended a January slide which saw the worst month in a year. We can only hope after the dismal performance in January that the old saying - as January goes, so goes the rest of the year - does not prove to be true in 2010.

Markets were shaken last month on news of China's bank lending curbs and global debt worries. While the debt troubles in Greece are small (about 2% of the Eurozone) many analysts see Greece as a canary in the mine, and the real worry is Spain - which is much larger (about 10% of the EU) than Greece and which some economists say has a worse balance sheet than the Greeks.

Today's market gains were mostly fueled by a better than expected gain in personal income and the latest manufacturing data. The gains probably would have been greater except for December's construction spending report which was much worse than expected -down 1.2% when a drop of 0.5% was expected on Wall Street.

The housing sector continues to be a drag on the economy. While the sub-prime mortgage mess has faded, the newest problem is the number of foreclosures that are linked to unemployment and a growing wave of homeowners simply walking away from homes that are so far underwater. Until the inventory of foreclosed properties begins to wane .......... there is little hope of stability in the housing market.

Oil also ended its slide on Monday and closed at $74.99. Gold prices jumped $21.30 to finish at $1104.30.

Stocks Show Modest Gains

2010-01-26T01:28:00.002-05:00

The stock market halted its three day slide on Monday by posting a very modest gain. Prior to Monday, the market had shed 552 points in the last three trading sessions.

A series of recent political and economic events have investors acting very cautious. News from China has many analysts questioning the strength and scope of China's economic recovery. There is always a great deal of doubt regarding the truth and accuracy of government generated data from Chinese officials, and the most recently released data has many China watchers wondering just how strong the Chinese recovery is proving to be.

On the domestic front, markets worried about the impact of President Obama's attacks on the banking industry. Some investors fear not only will the recent proposals affect the banking sector's earnings, but they also worry about the unintended consequence of adding pressure on banks to further restrict lending. The last thing this fragile economy needs is any more downward pressure on the credit markets.

Another news tidbit which rattled investors was the chatter that Fed boss, Ben Bernanke may be facing a much harder time on the hill than had previously been anticipated. While it appears Bernanke has the votes to be confirmed, some analysts worry that he may come out of the confirmation process in a much weaker position than he entered the process. The less bipartisan support the Fed boss enjoys, the more difficult and politically charged his job becomes ....... as opponents view the Fed's directives through a political prism. The main rallying point of his opponents is centered in their position that Bernanke has kept interest rates too low for too long. If by some scenario Bernanke fails to be confirmed next week - markets will react adversely when the news breaks.