If it weren't for a crash late in the day Friday, it may have been another positive week on Wall Street. But stocks fell dramatically in the last hour of trading and, when the dust had settled, the Dow Jones Industrial Average (DJINDICES: ^DJI ) was down 1.23% for the week, and the S&P 500 (SNPINDEX: ^GSPC ) had fallen 1.14%.
Economic data was mixed with consumer confidence hitting a level we haven't seen since July 2007, and GDP growing more slowly than expected in the first quarter. Interest rates also began rising this week, and that may hurt the tepid economic recovery. With government spending falling, and interest rates having nowhere to go but up, it's likely to be a choppy remainder of 2013, as consumers and investors adjust to the new state of the economy.
There weren't a lot of winners on the Dow this week, but mega banks Bank of America (NYSE: BAC ) and JPMorgan Chase (NYSE: JPM ) were among them, after gaining 3.2% and 1.7%, respectively. There was more positive news out of the housing industry, and RealtyTrac reports that foreclosure sales were down 18% sequentially in the first quarter, and down 22% from a year before. That's both a sign that people are now able to pay their mortgages, and that home values are rising, and that's good for banks.
The more important news this week may be what's called a steepening yield curve. When short-term interest rates are low, and long-term interest rates are high, it's called a steep curve; so when long-term rates jumped this week, the curve got steeper. That's good for banks, which can borrow money short term, and loan it out long term in mortgages or other loans. As the curve gets steeper, profits should go up, and that helped bank stocks this week.
Rounding out the top three Dow stocks this week was Cisco Systems (NASDAQ: CSCO ) , which was up 2.5%. The company made headlines this week by arguing in a European court that Microsoft's deal to buy Skype should have been looked at more closely before being approved. CEO John Chambers said he doesn't want the deal undone, but wants greater interoperability, which would allow Skype to communicate with systems like Cisco's TelePresence.