US stocks were mixed over the past week, with the Dow Jones industrials posting its first weekly gain since late April amid hopes Europe would tackle its debt crisis and some positive domestic economic data.
The blue-chip Dow rose 0.44 percent in the week to Friday to 12,004.36, reversing course after it had fallen for six straight weeks. The broader Standard & Poor’s 500 index ended where it had started, rising by less than a point to 1,271.50. The tech-heavy Nasdaq Composite fared the worst, falling 1.03 percent to 2,616.48.
Trading was volatile, with the Dow rallying 1.03 percent on Tuesday before collapsing 1.49 percent on Wednesday. Much of the choppiness was due to the situation in Greece, where protests challenged a wobbly government seeking to impose unpopular austerity measures as European leaders struggled to defuse the country’s debt crisis.
By Friday, Greece had gotten a new finance minister and Germany and France had appeared to unite around the need to stop the Greek contagion from infecting Europe’s major banks, causing markets to perk up again. “In our view the risk is now diminished since the large powers in Europe have reached an agreement in principle,” said David Kotok, chairman and chief investment officer of Cumberland Advisors.
Investors were also heartened by several reports showing that the US economy was not faring as badly as many had feared. Reports showed that retail sales fell less steeply in May than expected, and that housing starts rebounded 3.5 percent in May.
The index of leading economic indicators rose 0.8 percent in May, the first gain in 10 months, according to a monthly report from the Conference Board. “Those things combined have helped to renew a little bit of hope that the soft patch is indeed a soft patch and not something more ominous,” said Gina Martin, equity strategist at Wells Fargo Securities.
Energy stocks fell along with the price of oil, with New York futures for light, sweet crude dropping about $6 to close at $93.01 on Friday. ExxonMobil was down 1.2 percent for the week and Chevron was down 0.9 percent. Telecoms were up, with AT&T gaining 1.6 percent and Verizon rising 0.8 percent for the week.
Shares of Research in Motion tumbled more than 21 percent on Friday after the BlackBerry maker released a disappointing earnings report. Another big disappointment was Pandora, an Internet radio company which held a much-hyped IPO on Wednesday, debuting at $16 a share. After briefly surging to $26 in early trading, Pandora tanked, closing at $13.40 on Friday, down more than 16 percent from its IPO price.
The reversal of fortune for the Dow may have just been the market naturally bottoming out after its lengthy slump, some analysts said. “One has the impression that the people who wanted to sell have already sold,” said Gregori Volokhine, president of Meeschaert Capital Markets.
Next week, investors will be eagerly anticipating whether the Federal Open Markets Committee (FOMC) – the body within the Federal Reserve that sets interest rates – decides to launch another round of economic stimulus.
The FOMC will meet Tuesday and Wednesday, and Fed chief Ben Bernanke will speak at a press conference on Wednesday. “It looks like the Fed is going to dominate attention next week,” said Martin of Wells Fargo. “Who knows what they are going to pull out of their hat? Sometimes they do surprise.”
US stocks mixed as Dow ends six-week slide
