Stocks held back on giving investors the royal treatment last week, even with Queen Elizabeth visiting.
The pageantry of the Dow continued on Monday, as more merger news kept the index marching higher for its fifth consecutive closing high. The spectacle ended Tuesday, though, with a mere 3.9-point loss, as the S&P 500 and Nasdaq closed narrowly mixed.
The Fed's decision on Wednesday to keep the federal funds target rate at 5.25%, and its largely unchanged policy statement, sent stocks higher once more. Each of the three major indices gained, with the Dow rising more than 53 points.
On Thursday, the market bowed to weak retail sales and a higher-than-expected trade deficit, which sparked a widespread sell-off. Each of the major indices lost more than 1%, and the Dow dropped more than 147 points. The week ended on a more positive note, with equities rebounding on Friday because of signs of slowing inflation. The Dow regained more than 111 points, the S&P more than 14, and the Nasdaq 28.
Economic data scheduled for release includes the consumer pricing index and housing market index tomorrow, housing starts and industrial production on Wednesday, leading economic indicators on Thursday, and preliminary consumer sentiment on Friday.
Corporations reporting earnings include Home Depot and Wal-Mart tomorrow, Federated Department Stores, Hewlett-Packard, and Napster on Wednesday, followed by Intuit, J.C. Penney, Kohl's, and Nordstrom on Thursday.
Stay market-tuned and Foolish!
Capital Markets Summary
U.S. Equities
|
5/11/07 Close |
Weekly Change (%) |
YTD Change (%) |
|
|---|---|---|---|
|
Dow |
13,326.22 |
0.5 |
6.9 |
|
Nasdaq |
2,562.22 |
(0.4) |
6.1 |
|
S&P 500 |
1,505.85 |
0.0 |
6.2 |
|
Price ($) |
Weekly Change (%) |
|
|---|---|---|
|
Crude oil |
62.37 |
0.7% |
|
Gold |
672.30 |
(2.5%) |
Foolish Quiz
1. The Dow's triple-digit loss on Thursday was its largest in:
(a) one week
(b) one month
(c) one quarter
2. True or false: The Dow's winning streak, which ended on Tuesday, was its longest ever.
3. At the annual meeting of Berkshire Hathaway
(a) an acquisition
(b) increased international exposure
(c) ukulele playing
(d) all of the above
4. True or false: Whole Foods
5. True or false: Alcan
6. Which disappointed Cisco
7. True or false: Disney
8. True or false: The Easter Bunny's early arrival took a bite out of Wal-Mart's same store sales in April.
9. True or false: Investors applauded an email mishap at Hewlett-Packard.
10. Shares of which company made Mom wealthier last week: Revlon or Sotheby's?
Bonus question: Who is older -- the Big Board or Queen Elizabeth?
Answers
1. (b). The Dow's previous triple-digit decline came on March 13. If you answered "a", be ashamed, very ashamed -- and read on.
2. False. The Dow's streak of five consecutive record closes tied a similar run in the summer of 1927.
3. (d). At the annual lovefest in Omaha, Mr. Buffett disclosed an interest in buying a "huge" business for the company, although he said it was unlikely that it would be Dow Jones. He also advocated increased international exposure and indulged investors with his ukulele prowess
4. False. Late Wednesday, Whole Foods reported an 11% drop in second-quarter earnings, because of costs related to new store openings. The grocery-store operator also stated that regulators have requested additional information regarding its planned $565 million acquisition of Wild Oats. Shares withered by 10.2% on Thursday.
5. False. Despite recent rumors that it was a takeover target, Alcoa launched a bid to acquire Canadian rival aluminum player Alcan for $27 billion. Shares of Alcoa finished the week up 8.8%, while those of Alcan soared 31.2%.
6. Cisco's outlook. Despite posting a 34% gain in third-quarter profits on Wednesday, the company's failure to raise its fourth-quarter forecast disappointed investors, and shares fell 6.5%.
7. False. After Tuesday's close, Disney reported a 27% jump in net profit, but revenue was essentially flat, and investors sent shares down 1.2% the next day.
8. True. When all else fails, blame it on a bunny. Wal-Mart recorded a 3.5% drop in same store sales for April, its worst such results in at least 27 years, citing bad weather and an early Easter holiday. Rival Target fared even worse, with same-store sales falling 6.1%. The company blamed a sales shortfall during the first two weeks of the month, as well as Easter's early arrival.
9. True. Shares of H-P advanced 2.8% on Tuesday on news that warmed the hearts of email klutzes everywhere. The computer-solutions provider upped its second-quarter guidance following "inadvertent disclosure" of the financial info via an internal email sent Monday evening to an outside party.
10. Revlon. If we're just looking at last week's performance, the cosmetics company fared better with a penny-per-share gain. That equals an 0.8% advance, compared to a 0.4% slip from Sotheby's. Don't count Sotheby's out, though. On Monday, the auction house reported a 54% surge in first-quarter revenue and a $24.3 million profit. On Tuesday, Revlon reported a narrowing of its quarterly loss, but only a slight uptick in revenues. If you still need to pick up a little something for Mother's Day, check out the Fool's series on gifts for Mom.
Bonus answer: Depends on whom you ask. Although Queen Elizabeth is 81, a faux pas made by President Bush last week implied that she had celebrated this country's founding in 1776. If so, that would make her older than the Big Board, which traces its origins to a 1792 agreement in which 24 New York City brokers agreed to trade securities on a commission basis.
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!
Home Depot, Wal-Mart, and Berkshire Hathaway are Motley Fool Inside Value picks. Whole Foods and Disney are Motley Fool Stock Advisor selections. Whatever your investing style, the Fool has a newsletter for you.
Fool contributor S.J. Caplan, a former vice president and assistant general counsel of Goldman Sachs and former vice president and derivative finance specialist at Lehman Brothers, owns shares of Sotheby's. She serves as an arbitrator for the New York Stock Exchange and the NASD. The Fool has a disclosure policy.
