After a rough start to earnings season, US stocks face a tidal wave of corporate results in the week ahead amid growing worries the US economic recovery is slowing.
Stocks fell off a cliff on Friday after a sagging consumer confidence index and mixed earnings spooked investors.
“What was looking like a nice week turned into a huge sell-off,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.
Detrick said the unfortunate combination of disappointing earnings and troublesome economic data “was all it took for the bears to take control.”
Over the week the Dow Jones Industrial Average fell 0.98 percent, to finish Friday at 10,097.90 points.
The tech-rich NASDAQ composite index gave back 0.79 percent at 2,179.05 points.
The S&P 500 index, a broad measure of the markets, dropped 1.21 percent to 1,064.88 points.
“Nonetheless, after a nearly 5 percent jump last week — a 1.2 percent drop for the week isn’t all that bad,” Detrick said.
Aluminum giant Alcoa, the first Dow member to report financial results, got the ball rolling on Tuesday with a swing into profit in the second quarter and a brighter outlook on global demand for the metal.
Investors cheered, sending the Dow into a triple-digit gain and driving the markets to the only strong rally all week.
The major indices finished lower on Thursday after seven consecutive days of gains that had lifted the blue-chip Dow about 7 percent.
But investors ran for cover on Friday after worrying US bank results and the University of Michigan’s consumer sentiment index plummeted in July to its lowest reading in 11 months.
The Dow dived 2.52 percent, the NASDAQ lost 3.11 percent and the S&P 500 shed 2.88 percent.
“Consumers remain worried about many things, including enacted and potential policy changes, high unemployment, weak house prices, lost wealth, and small raises. Also depressing sentiment is limited access to credit,” Scott Hoyt at Moody’s Economy.com said.
The week ahead will highlight the state of the distressed housing market, where prices continue to fall after the market began to collapse about three years ago. Reports are due on Tuesday on housing starts and building permits for last month, and on Thursday on existing-home sales.
US Federal Reserve Chairman Ben Bernanke is scheduled to provide two days of semiannual testimony on monetary policy to Congress, to the Senate Banking Committee on Wednesday and the House of Representatives Financial Services Committee on Thursday.
In minutes of the latest Fed policy-setting meeting published this week, the central bank lowered its economic growth forecast for this year to 3 to 3.5 percent from the 3.2 to 3.7 percent range predicted just months ago.
“While Fed chairman Bernanke’s remarks may not deviate significantly from the recent minutes, the hearing will nevertheless draw attention given concerns on the US outlook and potential Fed actions in the second half of 2010,” UBS analysts said in a client note.
Still, investors are expected to zero in on a slew of earnings reports as the season picks up steam.
A dozen of the Dow’s 30 blue-chip stocks will be reporting, including IBM, Texas Instruments, Johnson & Johnson, Coca-Cola, Caterpillar, Microsoft and 3M.
Among other big firms slated to release results are Goldman Sachs, Morgan Stanley, Yahoo and Apple.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique