Weekly Market Recap – May 18, 2012
Stocks closed lower every day last week, extending their losing streak amid worries about the U.S. and global economies. One of largest IPOs ever – Friday’sFacebook debut -provided fewer fireworks for the market than anticipated. Europe’s ongoing political and economic troubles, and fresh signs of slowing growth in China, drove investors out of equities and commodities and into perceived safer havens, including the U.S. dollar and Treasuries. The sell-off came even though U.S. data showed gains in April housing starts, industrial production, and capacity utilization. Losses mounted throughout the week as worries about Europe’s debt woes and the teetering global economy offset favorable earnings reports posted by retail giants Wal-Mart and Sears. In policy news, minutes to the latest Federal Open Market Committee meeting indicated more stimulus may be needed in the U.S. if the economy here loses momentum.
|1 Week||YTD||1 Year||Closing Value|
|Dow Jones Industrials||-3.5%||1.2%||-1.9%||12,369.38|
Source: Standard & Poor’s. The S&P 500, Dow Jones Industrials, and Nasdaq Composite are unmanaged indexes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
*Price only. Does not include dividends.
Facebook Facebook shares opened 11% higher Friday, but struggled to stay above the offering price as traders complained of difficulty getting information on orders. Shares, which were initially priced at $38, opened Friday around $42 but fell back to just over $38 by day’s end.
Fixed-income focus The 10-year Treasury yield moved lower yet again to 1.71% on Friday afternoon from 1.87% the previous week, as global economic uncertainty continued to fuel a flight to safety.
Upcoming releases With few reports out in the coming week, markets will focus on housing and durable order data, hoping to see positive economic momentum. Existing home sales for April are expected to fall to 4.465 million annualized units after dropping to 4.480 million units the previous month.