Week in Review
Have a strong weekend!
Money continued to pour into large and med-cap equities this week as mutual fund managers reallocated their portfolios ahead of the 4th quarter. The S&P500 hit multi-year highs and the DJIA was pulled toward its physiological high of 11,750. However, as mentioned in this week's 'Jo, the NDX and Russell have lagged behind their elder sisters and have yet to break out with strong conviction. If these smaller cap issues can move to the upside of their May sell-off, many opportunities will exist for the bulls.
Bond prices were under pressure all week as many analysts felt that yields were dropping too quickly. Commodities were able to halt their slide and crude contracts caught a bid, but it is apparent that the energy sector is no longer the market leader. Going into the last quarter, it will be important to keep an eye on new leadership and its impact on the tape.
The "Four Sisters" Performance
Consumers finally were less willing to dip into their pockets as consumer spending fell by 0.1% in August, the most in a year. (Fri 29th)
Big Tobacco faces new litigation challenges after a judge ruled in favor of a massive class action lawsuit. (Mon 25th)
The Commerce Department revised second quarter GDP down to 2.6% from initial reports of 2.9% as the pace of economic growth continues to soften. Durable good orders for the month of August were softer than expected as well. (Wed 27th & Thurs 28th)
Turmoil continues to mount at Sony (SNE) headquarters as Japanese firms Toshiba and Fujitsu announced a recall of Sony laptop batteries. Dell (DELL) also expanded its earlier recall of the faulty batteries. (Fri 29th)
Hewlett-Packard's (HPQ) new CEO Mark Hurd testified on Capitol Hill with regards to the corporate "shake-up" over boardroom leaks.
New-home sales rebounded during August as mortgage rates dropped and builders cut prices. The median selling price for a home dropped for the first time in over 3 years. (Thurs 28th)
Research in Motion (RIMM) easily beat analysts' expectations and issued strong guidance in the coming quarters. (Fri 29th)
Shares of Red Hat (RHAT) plunged after the company reported a 34% dip in quarterly profit related to stock-compensation expenses. (Tue 26th)
Walgreens (WAG) reported another stellar quarter, but investors remain cautious over Wal-Mart's (WMT) intention to sell discount drugs.
Lennar reported a 39% slide in quarterly profit and reduced their outlook as the housing market continues to cool. (Tue 26th)
Fashion retailer Dress Barn Inc. (DBRN) beat analysts' expectations and reaffirmed guidance. (Tue 26th)
Market Movers: Winners and Sinners
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