Slip-sliding away: From the oil disaster in the Gulf to disappointing unemployment numbers to Korean tensions to Hungary's talk of sovereign default--it all combined to blow a hole out of the bottom of the stock market on Friday. After a short but hardly sweet week of vacillation, the U.S. equities indexes lost more than 3% in a single day (5% for the Russell 2000, which barely hung on to a small gain for the year). Oil prices also plummeted as a result of the economic jitters, and the euro continued its slide against the dollar.
Market/Index | 2009 Close | Prior Week | As of 6/4 | Week Change | YTD Change |
DJIA | 10428.05 | 10136.63 | 9931.97 | -2.02% | -4.76% |
NASDAQ | 2269.15 | 2257.04 | 2219.17 | -1.68% | -2.20% |
S&P 500 | 1115.10 | 1089.41 | 1064.88 | -2.25% | -4.50% |
Russell 2000 | 625.39 | 661.61 | 633.97 | -4.18% | 1.37% |
Global Dow | 1984.48 | 1780.31 | 1741.90 | -2.16% | -12.22% |
Fed. Funds | .25% | .25% | .25% | 0 bps | 0 bps |
10-year Treasuries | 3.85% | 3.31% | 3.20% | -11 bps | -65 bps |
Last Week's Headlines
- Unemployment fell from 9.9% to 9.7% in May, and the economy created 431,000 jobs. Good news? Not really. It wasn't the economy but the Census Bureau that created all but 20,000 of those jobs, and those temp jobs will end over the summer. Also, according to the Census Bureau, part of the drop in unemployment resulted from 322,000 people leaving the pool of potential workers.
- U.S. manufacturing continued to expand. The Institute for Supply Management (ISM) said May was the 10th month of expansion in a row, with almost all industries reporting growth (the only area reporting contraction was petroleum/coal). The services sector also saw its fifth straight month of expansion; the ISM's index stood at 55.4%, the same level as the previous two months (a number over 50 indicates growth).
- Hungary became the latest country to rattle global investors. Government officials spent much of their weekend backtracking from statements on Friday indicating the country could be on the brink of default because of debt problems that could be twice as bad as anticipated.
- Construction spending was up 2.7% in April, according to the Census Bureau. That was reportedly the biggest monthly increase in almost 10 years, though it's still 10.5% lower than last year's April figure. Residential construction rose 4.4%, while public construction was up 2.4%.
Oil and European sovereign debt problems aren't going away as investors continue to assess the economic impact of the Gulf oil spill and banks' exposure to the threat of default.
Key data releases: Consumer credit (6/7); balance of trade, Treasury budget (6/10); retail sales (6/11).
Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.
--see disclaimer below--
.bmp)
