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Last Update: 02-Sep-11 16:34 ET
Weekly Wrap for August 29, 2011
Aggressive selling on Friday extended a slide that started on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss.
An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. Stocks even overcame an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009.
Stocks climbed in seven out of eight sessions for a cumulative gain of more than 8% before becoming winded on Thursday, when the stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. The move failed to hold when the S&P 500 encountered resistance near the 1230 zone, which marks the 50% retracement level between the July high and August low. Some conceived that the better-than-expected ISM reading, though relatively neutral on its own, could stand as evidence against the case for further monetary policy.
Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.
Still, talk of further easing resurfaced again on Friday, when stocks slumped 2.5% -- their worst one-day percentage drop in two weeks -- in response to a disappointing monthly payrolls report. According to official data, no nonfarm payroll additions were made during August. That contrasted with the consensus call for an increase of 70,000. Even nonfarm private payrolls increased by a mere 17,000, which is far less than the 110,000 that had been generally expected among economists polled by Briefing.com.
Concern that the disappointing employment data reflected weakness in the broader economy sent oil prices 2.9% lower to $86.33 per barrel, but the want for safety bolstered buying among precious metals, such that gold prices spiked 2.6% to $1877.20 per ounce and silver prices surged 3.8% to $43.12 per ounce on Friday. Treasuries climbed sharply, too, such that the yield on the benchmark 10-year Note returned to 2.0%.
Financials suffered the worst fate during the back-to-back losses. The sector shed 2.4% on Thursday then surrendered another 4.0% on Friday. The latest leg of losses was exacerbated by news that a dozen banks are the target of federal accusations regarding mortgage securities misrepresentation.
There wasn't a great deal of share volume at week's end, but that's mostly because many trading desks were thinly staffed ahead of the three-day weekend -- U.S. markets are closed on Monday in observance of Labor Day.
..Nasdaq 100 -2.3%. ..S&P Midcap 400 -3.2%. ..Russell 2000 -3.6%. ..NYSE Adv/Dec 443/2595. ..NASDAQ Adv/Dec 380/2186.
An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. Stocks even overcame an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009.
Stocks climbed in seven out of eight sessions for a cumulative gain of more than 8% before becoming winded on Thursday, when the stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. The move failed to hold when the S&P 500 encountered resistance near the 1230 zone, which marks the 50% retracement level between the July high and August low. Some conceived that the better-than-expected ISM reading, though relatively neutral on its own, could stand as evidence against the case for further monetary policy.
Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.
Still, talk of further easing resurfaced again on Friday, when stocks slumped 2.5% -- their worst one-day percentage drop in two weeks -- in response to a disappointing monthly payrolls report. According to official data, no nonfarm payroll additions were made during August. That contrasted with the consensus call for an increase of 70,000. Even nonfarm private payrolls increased by a mere 17,000, which is far less than the 110,000 that had been generally expected among economists polled by Briefing.com.
Concern that the disappointing employment data reflected weakness in the broader economy sent oil prices 2.9% lower to $86.33 per barrel, but the want for safety bolstered buying among precious metals, such that gold prices spiked 2.6% to $1877.20 per ounce and silver prices surged 3.8% to $43.12 per ounce on Friday. Treasuries climbed sharply, too, such that the yield on the benchmark 10-year Note returned to 2.0%.
Financials suffered the worst fate during the back-to-back losses. The sector shed 2.4% on Thursday then surrendered another 4.0% on Friday. The latest leg of losses was exacerbated by news that a dozen banks are the target of federal accusations regarding mortgage securities misrepresentation.
There wasn't a great deal of share volume at week's end, but that's mostly because many trading desks were thinly staffed ahead of the three-day weekend -- U.S. markets are closed on Monday in observance of Labor Day.
..Nasdaq 100 -2.3%. ..S&P Midcap 400 -3.2%. ..Russell 2000 -3.6%. ..NYSE Adv/Dec 443/2595. ..NASDAQ Adv/Dec 380/2186.
| Index | Started Week | Ended Week | Change | % Change | YTD % |
| DJIA | 11284.21 | 11240.26 | -43.95 | -0.4 | -2.9 |
| Nasdaq | 2479.80 | 2480.33 | 0.53 | 0.0 | -6.5 |
| S&P 500 | 1176.80 | 1173.97 | -2.83 | -0.2 | -6.7 |
| Russell 2000 | 691.79 | 683.36 | -8.43 | -1.2 | -12.8 |
