Wall Street stocks closed mixed last week,
despite Friday’s correction, spurred by strong housing and
manufacturing data. The S&P 500 slipped 0.2% last week and the Dow
average lost 1.1%. The Nasdaq climbed 1.2% in the week. The housing
market offered a pleasant surprise, as sales of newly-constructed
single-family homes fell only 0.6 per cent to a 530,000 annual pace – a
smaller decline than expected. Homebuilders rose 2.2% with a 4% gain
for Lennar helping to lead the way.
Technology stocks were the strongest gainers,
benefiting from some decent earnings news as well. Google added 3.4%,
while Ebay gained 4.1% and the sector advanced 1.6%. Juniper Networks
was the biggest winner in the sector after its second-quarter profits
jumped 40% and it lifted third-quarter forecasts. Juniper shares surged
17.7%.
Friday produced some more bad
news from the financials. Early gains were wiped out after data showed
rising foreclosures, and S&P said it might cut certain of the
ratings of Fannie Mae and Freddie Mac. The pair fell 3.9% and 6.1%,
respectively. The financial sector as a whole lost 0.6%. Although
somewhat obscured by the travails of the financials, earnings season
kicked into high gear this week. After 226 company reports, earnings
for the S&P 500 are down 24.6% on average. Excluding financials,
though, earnings grew by 9.3%.
European stocks fell for the third day last week on
concern losses in financial services may worsen and slowing economies
will stifle profit growth. Munich Re slumped the most in five years
after the world's second-biggest reinsurer warned of ``substantial''
writedowns on its stock investments. Hannover Re fell the most since
January. UBS AG slipped after New York sued the bank on allegations its
promotion of auction-rate securities was fraudulent. PagesJaunes SA led
media companies lower after cutting its sales forecast because of ``a
more difficult economic environment.'' UBS tumbled 6.1%. The European
bank hardest hit by subprime contagion was sued yesterday by New York
Attorney General Andrew Cuomo, alleging the bank's promotion of
auction-rate securities as safe, money market-like investments was
fraudulent.
The Nikkei gained 4.2%
in this holiday-shortened week, the biggest weekly advance since Feb.
15, while the Topix rose 3.7%. Japan's consumer prices climbed at the
fastest pace since 1998 in June as higher food and gasoline costs
squeezed household budgets, the statistics bureau said. Kokuyo Co.
surged 7.6%, the biggest advance since May 13. The Japanese maker of
office supplies beat its profit forecast by 67% after passing on higher
materials expenses and cutting costs.