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Last Update: 10-Jun-11 16:34 ET
Weekly Wrap for June 6, 2011
The stock market suffered wide-spread selling, pushing the Nasdaq and Russell 2000 in negative territory for the year. As stocks stumbled, market participant sought the relative safety of Treasuries and the dollar.
All 10 of the S&P 500 sectors fell. Defensive investments outperformed on a relative basis with utilities down just 0.5%. On the downside, financials (-3.9%) and tech (-3.1%) got hit the hardest. Selling was broad-based with only 57 companies trading higher in the S&P 500.
Heavyweight Apple (AAPL, -5.0%) weighed on the market. The company faced selling after it revealed its iCloud service and new mobile operating system.
Texas Instruments (TXN, -4.2%) issued a second quarter earnings warning, though losses from the announcement were limited on word the weakness is due to Nokia (NOK).
The major financials all saw selling pressure. Bank of America (BAC) fell 7.6% and Citigroup (C) shed 7.5%.
Fed Chairman Bernanke issued an economic outlook that failed to lift stocks because he didn't say anything all that surprising to alter a negative mood, and a trend, that has been prevailing for the last five weeks or so.
The Fed Chairman began his remarks with an acknowledgment that U.S. economic growth has been slower than expected so far this year, but that wasn't anything the market didn't already know. On balance, he kept to the party line that (a) commodity-based inflation pressures are transitory (b) the economy should regain momentum in the second half of the year and (c) economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
There was no hint of QE3, but anyone truly expecting him to go down that road with this speech was way ahead of themselves.
In economic developments, economic releases were mixed. The not-so-good news is that initial claims remained above 400,000 for the week ending June 4 while the good news is that the U.S. trade deficit narrowed to $43.7 bln in April from $46.8 bln in March, which was revised from an originally reported deficit of $48.2 bln, which will factor positively for GDP growth.
Briefly, initial claims rose 1,000 from the prior week to 427,000 and were slightly weaker than the Briefing.com consensus estimate of 423,000. A level above 400,000 is not typically consistent with strong labor growth. Although the latest reading doesn't cover the survey period for the June household survey on employment, it will nonetheless feed ongoing concerns about the frustratingly slow pace of recovery in the labor market.
All 10 of the S&P 500 sectors fell. Defensive investments outperformed on a relative basis with utilities down just 0.5%. On the downside, financials (-3.9%) and tech (-3.1%) got hit the hardest. Selling was broad-based with only 57 companies trading higher in the S&P 500.
Heavyweight Apple (AAPL, -5.0%) weighed on the market. The company faced selling after it revealed its iCloud service and new mobile operating system.
Texas Instruments (TXN, -4.2%) issued a second quarter earnings warning, though losses from the announcement were limited on word the weakness is due to Nokia (NOK).
The major financials all saw selling pressure. Bank of America (BAC) fell 7.6% and Citigroup (C) shed 7.5%.
Fed Chairman Bernanke issued an economic outlook that failed to lift stocks because he didn't say anything all that surprising to alter a negative mood, and a trend, that has been prevailing for the last five weeks or so.
The Fed Chairman began his remarks with an acknowledgment that U.S. economic growth has been slower than expected so far this year, but that wasn't anything the market didn't already know. On balance, he kept to the party line that (a) commodity-based inflation pressures are transitory (b) the economy should regain momentum in the second half of the year and (c) economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
There was no hint of QE3, but anyone truly expecting him to go down that road with this speech was way ahead of themselves.
In economic developments, economic releases were mixed. The not-so-good news is that initial claims remained above 400,000 for the week ending June 4 while the good news is that the U.S. trade deficit narrowed to $43.7 bln in April from $46.8 bln in March, which was revised from an originally reported deficit of $48.2 bln, which will factor positively for GDP growth.
Briefly, initial claims rose 1,000 from the prior week to 427,000 and were slightly weaker than the Briefing.com consensus estimate of 423,000. A level above 400,000 is not typically consistent with strong labor growth. Although the latest reading doesn't cover the survey period for the June household survey on employment, it will nonetheless feed ongoing concerns about the frustratingly slow pace of recovery in the labor market.
| Index | Started Week | Ended Week | Change | % Change | YTD % |
| DJIA | 12151.20 | 11951.90 | -199.30 | -1.6 | 3.2 |
| Nasdaq | 2732.78 | 2643.73 | -89.05 | -3.3 | -0.3 |
| S&P 500 | 1300.16 | 1270.98 | -29.18 | -2.2 | 1.1 |
| Russell 2000 | 808.13 | 779.54 | -28.59 | -3.5 | -0.5 |
