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After suffering a 5% slide last week, stocks rallied back by climbing almost 8% for their best weekly performance in more than three years.
The rally began Monday, when stocks surged almost 3% in response to news that Europe's authorities had discussed a fiscal pact that could make budget discipline legally binding and enforceable. Trade was relatively uneventful Tuesday, but buyers came pushing back in on Wednesday when China trimmed its reserve requirement ratio and then several major central banks announced coordinated actions intended to lower the pricing on temporary U.S. dollar liquidity swap arrangements. Pundits were quick to point out that such actions fail address the solvency problems in Europe, but they do offer enhanced liquidity. The S&P 500 booked a 4.4% gain -- its best one-day bounce in three months.
Thursday proved uneventful as participants opted to take a breather following the heady gains recorded in the preceding sessions. Same-store sales reports proved relatively mixed, making them of little interest to many market participants.
Buying resumed Friday, but strength then faded. Initial interest was helped by the November Employment number, which reported an increase of 120,000 nonfarm payrolls. That was on par with the 123,000 that had been generally expected among economists polled by Briefing.com. However, the headline Unemployment Rate fell to 8.6%, which is less than the 9.0% rate that had been broadly expected.
Corporate news was relatively light this week, but there were a few reports that propelled meaningful price movement. Zumiez (ZUMZ 28.99, +5.62) surged 39% this week, thanks to strong earnings and guidance. MBIA (MBI 10.62, +0.41) had a similar performance for the week, helped by positive broker comments and an affirmed rating from analysts at S&P. Magma Design Automation (LAVA 7.16, +0.03) also had a near 40% weekly gain because of its planned buyout by Synopsys (SNPS 27.44 -0.06).
Moving in the opposite direction, Celsion (CLSN 2.18, +0.07) dropped 22% after it announced Monday that it received unanimous recommendation by independent data monitoring committee to continue and complete phase III heat study of Thermodox as planned. Retailers Gildan Activewear (GIL 16.99, +0.63), Talbots (TLB 1.54, -0.12) and Francesca's (FRAN 16.00, +0.64) fell 25%, 19% and 18%, respectively, on earnings and guidance.
Next week brings several central bank directives, including the ECB on Thursday, which will be of great interest given increased expectations for another rate cut. The Bank of England is also due out Thursday, but there is less uncertatinty there. Additionally, Germany's Merkel and France's Sarkozy are expected to meet on Monday. That could provide influential headlines with regard to Europe's debt crisis.
The U.S. calendar lightens up a bit, but Monday brings Oct. Factory Orders and Nov. ISM Services, and Friday we get the Dec. Michigan Sentiment reading.
| Index | Started Week | Ended Week | Change | % Change | YTD % |
| DJIA | 11231.94 | 12019.42 | 787.48 | 7.0 | 3.8 |
| Nasdaq | 2441.58 | 2626.93 | 185.35 | 7.6 | -1.0 |
| S&P 500 | 1158.67 | 1244.28 | 85.61 | 7.4 | -1.1 |
| Russell 2000 | 668.78 | 735.02 | 66.24 | 9.9 | -6.2 |
