Stocks didn't put on any Oscar-worthy performances last week, as rising oil prices and inflationary price data upstaged the prior rally.

Equities closed higher on Tuesday after the extended holiday weekend, buoyed by merger news. Stocks gained broadly, with record closing highs in the Dow, the Dow Jones Transportation Index, and the Dow Jones Utilities Index.

A mixed market, marked by lower blue chips and higher tech stocks, took the spotlight for the next two days. On Wednesday, stronger-than-expected consumer price index data and higher commodity prices depressed the general market and ended the market's ascent. Tech stocks fared better, with the Nasdaq rising slightly to close at a new six-year high. A jump in energy prices on Thursday pushed blue chips further into the red, with the Dow dropping 52 points but the Nasdaq climbing 7 points on chip-sector strength.

On Friday, though, even techs couldn't keep their heads above water. The market fretted over the subprime mortgage industry and fell again, turning a week that started with fanfare into a farce.

Economic data scheduled for release this week includes January durable-goods orders and existing-home sales tomorrow, and preliminary fourth-quarter gross domestic product and new-home sales on Wednesday. On Thursday, we'll see February auto sales, January construction spending and personal income, and the Institute for Supply Management's manufacturing survey for February.

Corporations releasing earnings include Marvel Entertainment, Nordstrom, and XM Satellite Radio today, CBS, Federated Department Stores, and Sirius Satellite Radio tomorrow, Charter Communications, Liberty Media, and Martha Stewart Living on Wednesday, Dell, Gap, and Viacom on Thursday, and American International Group on Friday.

Stay market-tuned and Foolish!

Capital markets summary

U.S. equities

2/24/07 Close

Weekly Change

YTD Change

Dow

12,647.48

(0.9%)

1.5%

Nasdaq

2,515.10

(0.8%)

4.1%

S&P

1,451.19

(0.3%)

2.3%



Commodities

Price

Weekly Change

Crude oil

$60.90

3.01%

Gold

$686.70

2.02%



Foolish quiz
1. The Dow suffered its largest percentage drop in (a) six weeks, (b) six months, (c) six years.

2. True or false: Shares of Lehman Brothers (NYSE:LEH) led the S&P 500 lower on Friday.

3. Which discount retailer posted stronger earnings: Wal-Mart (NYSE:WMT) or Target (NYSE:TGT)?

4. Which home-improvement retailer built better-than-expected earnings: Home Depot (NYSE:HD) or Lowe's (NYSE:LOW)?

5. Which satellite radio operator will soon take top billing in the airwaves: Sirius or XM?

6. True or false: Oats were on sale at the market last week.

7. This company realized a legal victory last week: (a) Altria, (b) Hewlett-Packard, (c) Microsoft.

8. True or false: JetBlue soared to new heights last week.

9. True or false: Shares of Yum! Brands tasted extra yummy on Friday.

10. Which exchange is planning an equity offering: Hollywood Stock Exchange or Nymex?

Answers
1. (b). No award-winning performance was in store for the Dow last week; it suffered its largest percentage drop since August.

2. True. A 3.7% fall in shares of Lehman led the S&P 500 lower, representing the index's worst individual performance, as investors worried about loan delinquencies.

3. Wal-Mart. Shares of the nation's largest retailer rose 3.7% on Tuesday after it posted stronger-than-expected earnings and forecast a rosy outlook for the first quarter of 2007. Shares of rival Target also had a good outing that day, rising 2.2% after it outlined expectations for a 4% to 6% increase in February comps.

4. Lowe's. Although Lowe's on Friday reported a 12% drop in fourth-quarter profits because of a slowing housing market and a lack of hurricane-related expenditures, earnings still beat expectations, and shares rose 3.9%. Rival Home Depot announced on Tuesday a 28% plunge in profits, but shares gave back only 0.2% in the rising market.

5. Neither. In an announcement made Monday, the two rivals said they planned to merge in a $4.57 billion deal, with shareholders of each company owning approximately 50% of the new entity. Although regulatory hurdles remain, shares of Sirius rose 6.5% on Tuesday, while those of XM Satellite tuned in a 10.2% gain. Sirius won the prize of most actively traded stock of the day, accounting for 12% of Nasdaq's overall volume with 260 million shares changing hands.

6. True. Whole Foods announced late Wednesday that it will break bread with its rival Wild Oats and purchase the company for $565 million in a deal expected to close in April. Shareholders of Wild Oats will receive $18.50 per share, an 18% premium to the company's closing price. If you're shopping for bargains at the market, though, they may now be hard to find, after shares of Whole Foods gained 14% on Thursday, and those of Wild Oats surged by 17%.

7. (a). Altria. On Tuesday, the Supreme Court threw out a $79.5 million punitive-damage award against Philip Morris, a unit of Altria, in ruling that corporations can't be liable for harms incurred by consumers who are not a party to a lawsuit. Shares of Altria slipped 0.3% as the ruling left the door open to large damage awards in cigarette litigation. Lady Justice did not smile so kindly at Microsoft on Friday, which was ordered to pay $1.52 billion to Alcatel-Lucent for MP3-related patent infringement. Shares of Mr. Softy softened 1.7%, while those of Alcatel-Lucent rose by the same percentage. Hewlett-Packard experienced its own concerns, though not in a courtroom. The company reported a 26% increase in first-quarter profit late Tuesday, but shares slid 4.7% the next day amid doubts about future growth prospects.

8. False. The only thing soaring for JetBlue last week was the reportedly large amount of short positions held for shares of the airline. Bashed over its winter-storm strandings, the company announced an operational reorganization on Tuesday, the same day Morgan Stanley downgraded it and went so far as to call the stock "dead money" for the next several months. JetBlue lowered its first-quarter and full-year outlook the next day. Shares sank 3.5% for the week.

9. False. Not to humans, anyway. News reports on Friday of a rodent infestation at a Taco Bell restaurant in Manhattan eroded shares by 0.9%.

10. Nymex. The energy futures exchange is planning a $1 billion offering as early as next month to increase its small public float and allow restricted shareholders to realize profits. No news of any public offering of Hollywood Stock Exchange, the online entertainment stock market owned by Cantor Fitzgerald, where one can trade virtual shares of movies and celebrities, and even sell Oscar-nominee derivatives. Now, that's entertainment!

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!

Marvel Entertainment is a Motley Fool Stock Advisor selection. Wal-Mart is a Motley Fool Inside Value recommendation. Dell and Gap are recommendations in both newsletter services. XM used to be a Rule Breakers pick. 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 a 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.