The S&P 500 kicked off 2010 with a strong start, rising 2.7% on the first week of the year to 1,144.98. The rise last week came despite a worse-than-expected jobs report on Friday that shows the economy is still trying to find its footing. However, data on the services sector and wholesale inventories, which showed the economy is growing (albeit gradually), served as the basis for the market’s ascent last week.
Pops and drops
Here are the five biggest S&P 500 upticks and five biggest S&P 500 drops of last week (measured Friday close to Friday close):
Winners on the week:
|
Company |
Percentage Gain on the Week |
|---|---|
|
Zions Bancorp |
28% |
|
Marshall & Ilsley |
26% |
|
Lennar |
25% |
|
Nabors Industries |
23% |
|
AK Steel Holding |
21% |
Source: Capital IQ (a division of Standard & Poor's).
Losers on the week:
|
Company |
Percentage Loss on the Week |
|---|---|
|
GameStop |
(8%) |
|
MetroPCS Communications |
(7%) |
|
Expedia |
(6%) |
|
Mylan |
(5%) |
|
Verizon Communications |
(4%) |
Source: Capital IQ (a division of Standard & Poor's).
A closer look
Lennar swung to a surprise profit in its fiscal fourth quarter; however, the profit was thanks to a one-time deferred tax effect. Still, it was the first time the nation’s fourth-largest homebuilder had reported a quarterly year-over-year increase in new orders since 2006. The company gave investors reason for optimism after commenting that the housing market is continuing to “move toward stabilization as more confident homebuyers took advantage of increased affordability and the $8,000 federal tax credit.” That said, challenges remain -- namely, high unemployment levels, a new wave of foreclosures that could place downward pressure on prices, and probable rising interest rates.
On the flip side, GameStop provided a negative surprise. The world’s largest video game retailer issued a disappointing holiday sales report featuring plummeting same-store sales, forcing the company to lower its fourth-quarter earnings outlook well below analysts’ expectations. As my colleague Rick Aristotle Munarriz writes, if the company has issued flawed near-term guidance in the past, how can we trust its outlook now?
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