There WILL Be a Quiz: Weekly Markets Recap

Despite the robust labor-market reading released the prior Friday, when the stock market was closed, Wall Street traded in a restrained fashion on Monday. Prices closed narrowly mixed, despite plunging oil prices and deal activity, as investors seemed more interested in awaiting the start of earnings season. Stocks continued their earnings vigil and rested on Tuesday, remaining in positive territory.

The market dropped on Wednesday amid a forecast of a home-sale slump and the release of the prior Federal Open Market Committee meeting minutes, which raised the possibility of future rate hikes. Investors transmitted their dismay, sending shares down across the board, with the Dow losing 90 points.

On Thursday, strong figures from the retail sector helped boost stocks, and the market made solid advances. Enthusiasm about earnings reports and merger news overcame mixed economic data to lift equities again on Friday.

Economic data scheduled for release this week include retail sales and business inventories, the consumer price index, housing starts, and industrial production, and leading indicators and the Philly Fed survey on Thursday.

The earnings season revs up this week. Just some of the corporations releasing earnings: Citigroup, Eli Lilly, and Mattel today, Coca-Cola, IBM, Intel, and Yahoo tomorrow, Abbott, eBay, and Motorola on Wednesday, Merrill Lynch, Nokia, and Nasdaq on Thursday, followed by Caterpillar, Honeywell, McDonald's, and Xerox on Friday.

Stay market-tuned and Foolish!

Capital Markets Summary

U.S. Equities

Commodities

Foolish Quiz
1. True or false: The Dow's winning streak, which concluded with Tuesday's session, marked its longest run in over four years.

2. True or false: Merck (NYSE:MRK) gave the Dow a shot in the arm on Friday.

3. True or false: Alcoa (NYSE:AA) furnished a lackluster earnings report.

4. General Electric (NYSE:GE) reported:
(a) increased quarterly earnings
(b) an optimistic outlook
(c) subprime woes
(d) all of the above

5. Last week, Citigroup (NYSE:C) announced:
(a) an upcoming acquisition of a Taiwanese bank
(b) earnings
(c) layoff plans
(d) all of the above

6. True or false: Dow Chemical (NYSE:DOW) put itself on the block.

7. True or false: The Oracle of Omaha has been working on the railroad.

8. Which retailer posted disappointing sales figures for March: Federated or Target?

9. True or false: The Common Man has his own stock index.

10. True or false: Shares of CBS advanced following the dismissal of Mr. Imus.

Answers
1. True. The Dow's eight-day consecutive winning streak was its longest since March 2003.

2. True. Shares of Merck gained 8.3%, contributing 30 of the 59 points the Dow climbed on Friday. The drug company's shares advanced when it raised its earnings outlook both for the quarter and for 2007, as well as from beneficial legal developments in its Vioxx cases. 

3. False. Although Alcoa kicked off earnings seasons strongly late Tuesday by posting a 9% hike in first-quarter profits and robust sales, shares finished the next day's depressing session just 0.5% higher.

4. (d). Bellwether GE reported 2% growth in first-quarter earnings, which included lackluster performance from its WMC mortgage unit, a large issuer of subprime loans. Still, CEO Jeff Immelt said he believes the business will rebound, that management is optimistic over prospects of selling the struggling plastics unit, and that the company's infrastructure business reflects the beginning of a long growth run.

5. (a), (c). Citigroup announced on Monday its intention to acquire Taiwan's Bank of Overseas Chinese for approximately $426 million. The next day, it confirmed a layoff plan affecting 17,000 employees. For the week, shares inched up 0.1%.

6. False. Shares of Dow headed 4.9% higher on Monday following reports that it might be the subject of a $50 billion LBO, denied by the company. Later in the week, two top execs were fired for "unauthorized discussions" about the company's sale.

7. True. An SEC filing revealed that Warren Buffett has become the largest shareholder of Burlington Northern Santa Fe, holding a 10.9% stake. This news cheered railroad investors. The company also sold $1.3 billion of debt in a larger-than-planned two-tranche offering, its biggest debt offering to date. Whistles were a-tootin' for investors, as shares chugged 9.6% higher for the week.

8. Federated. The department store operator missed its own forecast as same-store sales increased only 2.3%, blamed on cold weather and soft demand for home goods. Things were rosier in the retail sector generally, including in the discount aisles, with Target reporting a stronger-than-expected 12% rise.

9. True. The National Association of Investors Corp. and Nasdaq launched a new index last Monday. Unofficially dubbed the "Index of the Common Man" by The Wall Street Journal, the index tracks investment club portfolios and may spawn related investment products. Doesn't that make an Index of the Common Fool sound attractive?

10. True. Shares of CBS picked up 0.1% on Friday following the announcement late Thursday of the talk show host's dismissal. Shares advanced 1.4% over the course of the week which saw advertisers such as Procter & Gamble suspending their support. Standard & Poor's also confirmed that the firing would have no immediate impact on the credit rating of CBS or its subsidiaries.

Scoring
8-10 correct: Foolishly impressive.
6-7 correct: Almost Foolish.
1-5 correct: OK, but just barely.
0 correct: Really?! Keep reading the Fool, and watch your scores improve!

Intel is a Motley Fool Inside Value pick. eBay and Yahoo are Motley Fool Stock Advisor selections. Dow Chemical and Eli Lilly are Motley Fool Income Investor recommendations. Whatever your investing style, the Fool has a newsletter for you.

Fool contributor S.J. Caplan is a former vice president and assistant general counsel of Goldman Sachs and former vice president and derivative finance specialist at Lehman Brothers. She serves as an arbitrator for the New York Stock Exchange and the NASD. The Fool has a disclosure policy.