Hold on to your Team USA nut-coddling Speedos, it’s getting choppy out there in the Wall Street kiddie pool. The Dow suffered 3 straight triple-digit losses earlier in the week only to bounce back Thursday and Friday with 2 of its biggest days in over a month.
The main market movers have been the quarterly earnings reports rolling out like some kind of red carpet event during the Opening Ceremonies: firms are strutting their profits & losses in front of ogling analysts. With low expectations, most continue to beat forecasts, like Boeing, Caterpillar and 3M (Exxon Mobil even set an earnings record of $15.9B). Netflix, Starbucks and Amazon disappointed, along with the two stars of the show: Apple and Facebook. Apple earnings grew 21% from the same time last year, but missed expectations for only the 2nd time in 39 quarters as consumers wait for the iPhone 5. Facebook shares dropped to a new low along with Zynga as the social network met expectations, but investors aren’t excited about its outlook.
Over in Euroland, not everyone’s getting chipper for the Olympics. Investors were worried as more Spanish regional provinces asked the central government for aid, credit ratings agency Moody’s grew concerned about Germany’s debt holding up the entire Eurozone and Greece’s odds of cutting the euro grow daily. But European Central Bank President Mario Draghi jumped in to say he would do “whatever it takes” to prevent an EU breakup – the confident locker-room speech powered the markets up 212 points on Thursday and 188 points on Friday
Back here in America, econ news was somewhat mixed. The number of jobless claims over the last week dropped and orders for durable goods in June rose more than forecast, while sales of new homes dropped to their lowest level in 5 months. Second quarter GDP numbers in the US made the biggest splash: the US economy growing at an annualized 1.5%, which beat economists’ forecasts, but is a decline from the 1st quarter’s 2% growth rate. Now onto a big week ahead featuring July’s government employment report on Friday and Brazilian women’s beach volleyball on CNBC.
The Dow Jones Industrial Average increased 2% and is up 7% this year while the S&P 500 managed a 1.7% gain this week and 8.5% this year.
Links Worth Snacking On:
- Bloomberg - BlackBerries are a disappearing fruit…so what can Research in Motion learn from Apple‘s comeback a decade ago
- NYTimes – The eBay comeback is paying off
- Bloomberg BusinessWeek - The MarketSnacks team enjoys a good debate…so what was the impact of the ’99 legislation that opened the door for Too big to fail banks to form?
- The Street – What you learned in Econ 101 – well you can throw that away when it comes to gasoline prices.
- Monday – The Fed’s Survey of Texas Regional Manufacturing Activity, Earnings: Martha Stewart
- Tuesday – June Personal Income, June Consumer Spending, S&P/Case-Shiller Home Prices for May, Earnings: Aetna, Pfizer, Electronic Arts
- Wednesday – ADP July Jobs, ISM July Manufacturing Survey, Earnings: MasterCard, MetLife
- Thursday – Weekly Jobless Claims, June Factory Orders, Earnings: General Motors, AIG, LinkedIn
- Friday – July Non-Farm Payrolls & Unemployment, ISM Non-Manufacturing
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