This week started off with a bang. The markets were moving higher with the hope that some resolution for the fiscal cliff would come during the week. But by Wednesday, the optimism was lost and the Republican Party was set to vote a bill that would have favored their beliefs. By late Thursday evening, the bill was pulled for lack of support, and when the markets opened on Friday morning, they quickly moved lower. But because of very strong moves higher early in the week, all three of the major indexes closed the week in the green.
The Dow Jones Industrial Average (DJINDICES: ^DJI ) posted a weekly gain of 0.41%, while the S&P 500 (SNPINDEX: ^GSPC ) rose higher by 1.2%, or 17 points, and the Nasdaq (NASDAQINDEX: ^IXIC ) actually performed the best, gaining 1.54% during the past five days of trading. Although the Dow was up this week, it lost to the other major indexes after its 30 components ended the week split, half in the red and half in the green.
But, before I get to the Dow losers, I'd like to point out the big winner of the week. For the second time this month, Bank of America (NYSE: BAC ) was the best-performing Dow stock. The bank has clearly had a number of good weeks, since the stock is up 103% year to date. This week, one of its key drivers was the positive numbers which for pre-owned housing sales, which came out on Thursday and showed that sales increased by 5.9% in November and 14.5% higher over November 2011.
Shares of Bank of America, meanwhile, ended the week higher by 6%, while fellow Dow banking stock JPMorgan Chase (NYSE: JPM ) also rose by 2.32%. The other two notable Dow winners this week were Walt Disney (NYSE: DIS ) and Boeing (NYSE: BA ) , whose shares rose by 2.62% and 2.65%, respectively.
Now to this week's losers
Shares of Merck (NYSE: MRK ) fell by 4.83% this week, after the company reported that not one, but two different drugs missed key goals during trial studies. On Wednesday, the company announced that its experimental lung cancer cure failed to hit its goal. The company had high hopes for the drug, and some believed it could be Merck's next $1-billion-a-year product.
The second blow came just a day later, when it was announced that Merck's Tredpative, a cholesterol-fighting drug, also missed key goals during a large-scale trial. The company said it won't attempt to get FDA approval for the drug and began recommending that doctors in Europe, where the drug has already been approved, stop prescribing it to new patients.
The fiscal cliff fears also played a slight role in causing Merck to become the Dow's biggest loser this week. Shares of Pfizer (NYSE: PFE ) , the Dow's other big pharmaceutical stock, dropped 0.35%.
Caterpillar (NYSE: CAT ) saw its shares move lower after the company announced regional sales numbers from dealers around the world. In November, sales growth slowed to the lowest levels seen all year, save for in Latin America. In the Asia/Pacific market; the Europe, Africa, and the Middle East market; and and the U.S. market, growth moved higher by just 2%, 3%, and 3%, respectively. Caterpillar ended the week down 1.51%.
Caterpillar also is seen as one of the major economic gauges on the health of a regional economy or the world economy. Since some analysts believe if the U.S. falls off the cliff, the country will return to a recession, after the stalled cliff talks, Caterpillar lost value as shareholders retreated.
Another economically sensitive stock that fell this week on fiscal cliff fears was Alcoa (NYSE: AA ) . The aluminum producer lost 2.28% during the past five days and is now down 0.92% year-to-date.
Shares of both of the Dow telecommunications companies -- AT&T (NYSE: T ) and Verizon (NYSE: VZ ) -- moved lower this week by 1.2% and 1.53%. Increased investor concern over the possible rise of Sprint Nextel (NYSE: S ) , now that the company has the financial strength to pose a threat to the two top wireless service providers, affected the stock prices of both companies this week. Both were also hit by fears of the fiscal cliff this week, but they didn't gain enough early in the week to offset the drops at the end.
The other noteworthy Dow losers this week were ExxonMobil (NYSE: XOM ) , down 1.27%; Home Depot (NYSE: HD ) , 1.33%; Coca-Cola (NYSE: KO ) , 2.38%, Hewlett-Packard (NYSE: HPQ ) , 2.58%; and General Electric (NYSE: GE ) , 3.73%.
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