US stocks registered modest losses for the third consecutive week that ended on Friday, 27 August 2010. Losses were modest due to substantial gains registered during the last trading day of the week. Stocks ended higher on Friday, after Fed Chairman Bernanke fueled a large rally on Friday, helping to offset some of the growing concerns regarding the pace of the economic recovery.
For the week, that ended on Friday, 27 August 2010, Dow ended lower by 62.97 points (0.6%) at 10,150.65. Nasdaq ended lower by 26.28 points (1.2%) at 2,153.63. S&P 500 ended lower by 7.1 points (0.7%) at 1,064.59.
Seven out of ten economic sectors ended lower led by technology sector. Utilities sector led the pack of three gainers.
Economic data acted remained the main newsmaker for the week. The housing data showed that the industry remains in tough shape, with the latest data pointing to a double dip in housing. Existing home sales plummeted 27.2% to a 3.83 mln seasonally adjusted annual rate (consensus 4.72 mln) in July - marking the lowest level since records began in 1999. Meanwhile, new home sales in July declined to 276,000 (consensus 334,000), which is the lowest level since records began in 1963.
But the news that garnered the maximum attention was the takeover bid from Dell and H-P for 3 Par. Dell and H-P started a bidding war for data storage company 3Par. Though 3Par had already agreed to a takeover offer from Dell, Dell was forced to hike its bid to $24.30 and then $27 per share in order to fend off offers from HP. HP has since raised its offer for 3Par to $30 per share.
On Friday, 27 August, 2010, stocks ended the day substantially higher. Whipsaw trade followed a flurry of headlines in the early going, but buyers soon surfaced to drive down volatility and give stocks their best gain in three weeks. All ten economic sectors ended higher for the day led by material, financial, energy and industrial sectors.
On that day, the Dow Jones Industrial Average ended higher by 164.84 points at 10,150.65. Nasdaq ended higher by 34.94 points at 2153.65. S&P 500 ended higher by 17.37 points at 1,064.59.
The Commerce Department in US reported on Friday, 27 August 2010 that U.S. economic growth slowed to 1.6% in the second quarter of 2010. That was down from the preliminary rate of 2.4%, but it wasnt as poor as the 1.4% growth that had been widely expected.
The data also showed that gross domestic product, reflecting the inflation-adjusted, seasonally adjusted value of all goods and services produced in the U.S., slowed from the 3.7% annualized pace in the first quarter.
Participants also got a positive surprise with news that personal consumption for the second quarter was revised upward to reflect 2.0% growth after it had been expected to remain at 1.6%.
Earlier Friday, Bernanke spoke at the annual Fed summer retreat in Wyoming. He said the government would resist deflation but didnt directly say whether the Fed would take new measures to combat the slower pace of the recovery.
Early gains began to fade ahead of the final Consumer Sentiment Survey for August from the University of Michigan. The Survey was revised down slightly to 68.9 from 69.6 and was also below the reading of 70 that had been widely expected, but it was actually met with a bit of a positive response.
There was also a disappointing announcement from Intel. The chip bellwether forecast third quarter revenue in the range $10.8 billion to $11.2 billion, which fell short of market estimates.
In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies finished flat.
Crude prices registered gains on Friday, 27 August 2010. Prices swerved in and out positive territory for much of the session, but gains prevailed as the U.S. stock market rose and the dollar came off its highs for the day. On Friday, crude oil futures for light sweet crude for October delivery closed at $75.17/barrel (higher by $1.81 or 2.5%). For the week, crude ended higher by 1.8%. Weekly gains came after two weeks of consecutive losses.
On Friday, gasoline for September delivery, meanwhile, ended 4 cents higher, or 2.1%, to $1.95 a gallon. On the week, gasoline added 1%, breaking a spell of three consecutive weekly losses.
Natural-gas futures, however, continued their downward spiral, losing more than 4% on Friday and settling at a fresh 11-month low. Natural gas for September delivery, the expiring contract, declined 17 cents, or 4.4%, to $3.65 per million British thermal units. Natural gas lost 11% on the week.
Precious metals ended little higher on Friday, 27 August 2010 at Comex. On Friday, gold for December delivery ended at $1,237.9 an ounce, higher by $0.20 (0.1%) on the New York Mercantile Exchange. For the week, gold ended higher by 0.7%, up for fourth consecutive week. September Comex silver futures ended higher by 6 cents (0.3%) at $19.04. For the week, silver ended higher by 5.8%.
Indian ADRs ended mostly higher on Friday. Infosys was the sole exception, which slipped 0.5%. Tata Motors and HDFC Bank were the main gainers soaring 2.3% and 1.8% respectively.
For the year, Dow is lower by 2.7%. Nasdaq is lower by 4.5% and S&P 500 is lower by 5.1%.
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