Last week couldn't have been more different from the week before. Two weeks ago, the Dow Jones Industrial Average
First, the good news
Over the week, we saw three more reasons to believe the housing market is recovering. On Tuesday, the National Association of Home Builders released data showing that confidence among its members is at its highest point since June 2006. This revelation was followed on Wednesday by news that single-family home construction is up 27% year over year. Finally, on Friday, KB Homes, one of the nation's largest homebuilders, announced third-quarter earnings that blew away analysts' estimates.
Now, the bad news
The bad news is that manufacturing around the globe appears to be waning.
The biggest victim in this regard continues to be Europe. On Thursday, the Italian prime minister slashed his country's growth forecast for the year. Economists now expect the country's economy to contract by 2.4%, or nearly twice the previous estimate. On the same day, Markit, a global financial information-services company, released data showing that the 17-member eurozone is in the midst of the "steepest contraction since June 2009." One positive rumor to emerge concerned Spain's decision to ask for assistance from the European Central Bank. The move, if true, will help shore up the country's banks and financial system.
The developments in Europe were accompanied by similar ones in Asia. While markets were buoyed early in the week by the Bank of Japan's decision to add more monetary stimulus, this was followed by news that its exports slipped for the third consecutive month in August and that the resulting trade deficit is among the worst since the catastrophic Fukushima crisis in March 2011. Meanwhile, data out of China suggests that the global manufacturing giant continues to suffer from the West's malaise.
Finally, here at home, aside from the previously noted news from the housing sector, announcements from both the public and private sectors continue to paint a bleak picture. Data from the Department of Labor on Thursday showed that initial jobless claims came in above expectations. On the same day, the Federal Reserve Bank of Philadelphia published the results of a survey indicating that domestic manufacturing activity continues to contract. And out of the private sector, the market was hit with disappointing third-quarter earnings from economic bellwether FedEx and a downgrade in guidance from steel producer Nuccor.
3 worst-performing stocks
Given the preceding discussion, it's fitting that a majority of Dow stocks ended the week in the red. Far and away the most affected was Alcoa
Following closely behind was Bank of America
Rounding out the bottom three is Hewlett-Packard
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