Week in Review 14/10/11

Date of publish: 14/10/2011

For Financial week: 10-14/10/2011

Written by Matthew McCreath

Week in Review 

     Stocks soared, on Monday, as investors put their faith in a resolution to Europe's debt crisis and the ability of U.S. companies to power through an uncertain economy. The Dow Jones Industrial Average jumped 330 points, or almost 3%, to 11433, its biggest one-day surge in two months.  Monday's gains came after German and French leaders said they were determined to present a "comprehensive package" by the end of October that would include a plan to recapitalize euro-zone banks as needed and address the Continent's debt crisis.

     U.S. stock benchmarks ended a low-volume session close to the flat line Tuesday, with investors unwilling to make big bets ahead of an unofficial start to the earnings season and Slovakia’s vote on the euro zone’s bailout fund. The Dow Jones Industrial Average finished the day 17 points, or 0.2%, lower at 11,417. The S&P 500 Index inched up 0.65 point, or 0.1%, to 1,196. Utilities and telecommunication shares were hit the hardest, while technology stocks outperformed among its 10 industry groups. The Nasdaq Composite Index   climbed 17 points, or 0.7%, to 2,583.

     Stocks finished with strong gains, Wednesday, amid optimism about plans to recapitalize euro-zone banks. The Dow Jones Industrial Average advanced 103 points, or 0.9%, at 11519. The Standard & Poor's 500-stock index climbed 12 points, or 1%, to 1207, and the Nasdaq Composite advanced 22 points, or 0.8%, to 2605. With the gains, the Dow is up 5.6% this month, the fifth-best start to October since 1900, and is down just 0.5% on the year. During Wednesday's session, the Dow rose 209 points, putting it into positive territory for the year, before dropping in the final hour. The European Commission Wednesday set out its plan to shore up European banks in the face of the region's sovereign-debt crisis. In addition, Slovak lawmakers regrouped to broker a deal that would remove the remaining obstacle to enhancing the euro zone's government bailout fund.

     The financial sector led stocks lower, Thursday, following less-than-stellar results from J.P. Morgan Chase, while strength in technology shares limited the broader market's losses. The Dow Jones Industrial Average fell 41 points, or 0.4%, to 11478, after dropping as much as 141 points on Thursday. It marked the Dow's second drop in the last three sessions and biggest decline since Oct. 3. The blue-chip index still is up 5.2% this month and briefly moved this week into positive territory for the year before pulling back. It is down 0.9% this year. The S&P 500-stock index eased 4 points, or 0.3%, to 1204. Financial and industrial stocks registered the biggest declines, while technology stocks rose. Meanwhile, the Nasdaq Composite rose 16 points, or 0.6%, to 2620, marking its fourth straight gain. The technology-oriented index has gained 12% over the last eight trading sessions.

     Stocks rose Friday, driving the Dow Jones Industrial Average to its longest weekly winning streak in six months and pushing both the Dow and the Nasdaq Composite into positive territory for the year. The Dow industrials climbed 166 points, or 1.5%, at 11644, near the session high, en route to its first string of three straight weekly gains since the three-week period ending April 8. The S&P 500-stock index gained 21 points, or 1.7%, to 1224.58, with energy, material and technology stocks in the lead. The Nasdaq Composite advanced 48 points, or 1.8%, to 2668. Stocks rose amid strong U.S. retail-sales data, signs of progress in Europe's sovereign-debt crisis and stellar results from Google, all of which helped set the positive tone.