Both the St. Louis Cardinals and the Dow posted four winning scores last week to clinch victories.
The Dow continued to hit new records for the first four trading days of the week, faltering only in its final at-bat. Earnings optimism continued to power stocks to new highs on Monday. On Tuesday, stocks were mixed in narrow trading ahead of the Fed meeting, but still, the Dow batted in another record closing high.
The major indices advanced slightly on Wednesday, after an uneventful Fed meeting that left rates unchanged. For those keeping score, the Dow reached another record close, only to outperform the very next day. Stocks gained in choppy trading on Thursday, helped by declining oil prices and rising new-home sales but pinched by data revealing a sharp drop in new-home sale prices.
Stocks then choked on Friday, following weaker-than-expected gross domestic product data and a sell-off in semiconductors. Still, the three major indices notched gains for the week as they headed for home.
The lineup of economic data scheduled for release this week includes personal income today; consumer confidence tomorrow; construction spending and the Institute for Supply Management manufacturing index on Wednesday; productivity, factory orders, and chain-store sales on Thursday; and October employment data and the ISM non-manufacturing survey on Friday.
Corporations reporting earnings include ABN Amro, Blue Nile, Grey Wolf, Humana, MetLife, and Verizon today, and DreamWorks Animation,Eastman Kodak, Fresh Del Monte, Loews, Marathon Oil, Qwest Communications, Vonage, and Vornado Realty Trust tomorrow. On Wednesday, we'll hear from Baidu.com, Burger King, Deutsche Bank, Marsh & McLennan, MasterCard, Newmont Mining, Time Warner, and Wyndham, followed on Thursday by Barrick Gold, CBS, Dollar Financial, El Paso Electric, Electronic Arts, Morningstar, Smith & Nephew, Trammell Crow, Unilever, and Whole Foods Market. Finally, Berkshire Hathaway, British Sky Broadcasting, Liberty Mutual, and Washington Post will release earnings on Friday.
Stay market-tuned and Foolish!
Capital Markets Summary
U.S. Equities
|
10/27/06 Close |
Weekly Change |
YTD Change | |
|---|---|---|---|
|
Dow |
12,090.26 |
0.7% |
12.8% |
|
Nasdaq |
2,350.62 |
0.4% |
6.6% |
|
S&P |
1,377.34 |
0.6% |
10.3% |
Commodities
|
Price |
Weekly Change | |
|---|---|---|
|
Crude oil |
$60.75 |
3.51% |
|
Gold |
$602.30 |
1.41% |
Foolish quiz
1. Which index rose more on Thursday: the Nasdaq or the Russell 2000?
2. True or false: Intel (NASDAQ:INTC) led the Dow down on Friday.
3. Which automaker's shares fared better the day it reported earnings: Ford (NYSE:F) or General Motors (NYSE:GM)?
4. Which company delivered energized earnings: ExxonMobil (NYSE:XOM) or Halliburton (NYSE:HAL)?
5. Which defense contractor posted mightier earnings: Lockheed Martin or Northrop Grumman?
6. True or false: Investors tossed Red Hat aside last week.
7. True or false: Amazon commenced a legal suit against IBM on charges of patent infringement.
8. True or false: Stocks rose immediately following the Fed's policy announcement on Wednesday.
9. Which of these companies does not belong?
(a) BerkshireHathaway
(b) Clear Channel
(c) Goldman Sachs
(d) Google
10. True or false: Topps got a pop from World Series attention last week.
Answers
1. The Russell 2000. The small-cap index rose 1.2% on Thursday, beating the Nasdaq's 0.96% advance. The gains in the major indices on Thursday demonstrated broad-based support for the market's advance.
2. True. Intel fell 3.1% on Friday, the Dow's biggest decliner, following a report from Goldman Sachs citing weakening demand for computer motherboards.
3. Ford. On Monday, Ford reported a preliminary loss of $5.8 billion and announced that it will restate earnings from 2001 through the second quarter of 2006 to account for certain derivative transactions. Shares slipped 1.4%. On Wednesday, after GM posted a third-quarter loss of $115 million, compared with a $1.7 billion loss of a year ago, shares skidded 4.1%.
4. Both. Equating earnings reports with grades of gasoline, we might say that Halliburton's news was premium, while that of ExxonMobil rated super-premium. On Monday, oil-field service provider Halliburton announced a better-than-expected 25% increase in earnings, and shares rose 1.7%. Three days later, ExxonMobil shares advanced after the oil company reported a 6% increase in earnings to $10.5 billion, the second largest quarterly operating profit on record by a U.S. company -- behind its own $10.71 billion profit in the fourth quarter of last year.
5. Lockheed Martin. While both companies reported earnings on Tuesday, their results were polar opposites. Shares of Lockheed Martin rose 1% after raising its guidance for the year and reporting a 47% increase in earnings despite lower-than-expected sales. Rival Northrop Grumman reported slightly higher earnings but forecasted lower earnings and revenue than those anticipated by Thompson First Call. Shares fell 1.6%.
6. True. While St. Louis Cards fans may have tossed up their crimson caps in celebration, investors tossed off Red Hat. Shares of the software vendor plunged 24% on Thursday, following Oracle's announcement that it will provide inexpensive technical support for Red Hat's Linux software, the company's mainstay, for which it supplies its own support and licensing.
7. False. IBM is suing Amazon, claiming that the online retail giant's store was illegally built on technologies IBM developed. Investors shrugged off the news on Tuesday, sending shares of IBM higher by 1.2% and those of Amazon up 1%. Amazon shares traveled 17.4% higher for the week after reporting a mixed earnings picture that nonetheless cheered investors.
8. False. Stocks relinquished gains they achieved previous to the Fed's announcement. Instead of signaling dissatisfaction with the statement, market action most likely hinted at a renewed focus on valuations.
9. (b). From this list, only Clear Channel did not hit new all-time closing highs last week. On Wednesday, Google closed at $486.60, and the next day, Berkshire Hathaway finished at $104,700 and Goldman Sachs closed at $193.38. Investors in Clear Channel didn't catch any static, either. Its shares cleared 9.7% on Thursday, when the radio company broadcasted that it is considering strategic alternatives.
10. False. Shares of sports-card and bubble gum manufacturer Topps struck out last week, sliding 1.8%.
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!
MasterCard and Intel are Motley Fool Inside Value picks. Amazon and DreamWorks are Motley Fool Stock Advisor selections. Blue Nile is both a Motley Fool Hidden Gems and Motley Fool Rule Breakers recommendation. Whatever your investing style, the Fool has a newsletter service for you. You can also see what investors like you think of these and other stocks by checking out Motley Fool CAPS, our new stock-rating service.
Fool contributor S.J. Caplan, a former vice president and assistant general counsel of Goldman Sachs and former vice president and derivative finance specialist at Lehman Brothers, owns shares of Goldman Sachs and Google. She serves as an arbitrator for the New York Stock Exchange and the NASD. The Fool has a disclosure policy.
