18.08.2008 11:27

STOCKS: weekly review

US stocks climbed modestly on Friday in a quiet session of trading, and made slight gains for the week, as oil prices dropped back and investors digested some positive results from retailers. Over the week, the S&P-500 fought its way to a 0.1% gain – its third in a row. The Dow fell 0.7% while the Nasdaq added 1.4%. The leading equity indices received a boost from a sharp fall in commodity prices. Oil fell with energy sector fell back 1.8% and has now lost ground in seven of the past eight sessions. ExxonMobil and ConocoPhillips gave up 0.5% and 2.2%, respectively.

Kohl’s kicked off the day in positive fashion, reporting second-quarter profit that fell less than expected. The company also forecast full-year profit ahead of previous expectations and the shares rose 7.1%. JC Penney also cheered investors with a smaller- than-expected decline in second-quarter profit. JC Penney shares rose 8.4%. Meanwhile, Abercrombie & Fitch and Nordstrom posted less impressive results but investors were resilient. Abercrombie held steady while Nordstrom rose 4.4%.

In consumer staples, Wal-Mart Stores added 2.2% and Procter & Gamble climbed 2.7%, helping the sector to advance 1%. Reports showing a small uptick in consumer confidence and a bump in manufacturing activity in New York state in August also lifted sentiment. General Electric shares rose 1% while Manitowoc added 4.5% and Paccar climbed 4.8%.

Financials were the biggest losers after another round of writedowns and analyst downgrades and further developments in the auction rate securities fiasco. Goldman Sachs fell 7.5% over the week while JPMorgan lost 8.2% and Bank of America slid 5.6%. On Friday, banks fared better after S&P affirmed the credit ratings of the two largest bond insurers. MBIA and Ambac added 8.7% and 24.6%, respectively, while the sector added 1.1%.

European shares ended the week in negative territory as a sell-off in financials and commodities stocks offset gains for exporters, which were boosted by the strengthening dollar.The pan-European FTSE Eurofirst 300 fell over the week by 0.7%. Sell-off in the commodities sector led the metals stocks lower. French miner Eramet tumbled 11.6% over the week, Austrian steelmaker Voestalpine lost 7.3% while Norsk Hydro, the Norwegian aluminium producer, skidded 4.7%. Germany’s ThyssenKrupp slid 5.7% even though it reported forecast-beating third-quarter results, and Credit Suisse issued a bullish note saying the stock was undervalued.

Banks lost ground, with France’s Societe Generale shedding 5.6% and BNP Paribas falling 5%. Switzerland’s Credit Suisse dropped 5.9% after being fined by UK regulators. Smaller domestic peer Julius Baer lost 2.1%. In Austria, Erste Bank sank 6.1%.

For the week, the Nikkei lost 1.1% , while the Topix declined 1% , a third-straight weekly loss. JR Central dropped 2% after Mizuho analyst Satoru Kunieda lowered the company to ``hold'' from ``buy.'' The analyst also cut target prices on East Japan Railway Co. and West Japan Railway Co., which fell 0.6% and rose 1.2% respectively. Urban Corp., the property developer that this week became Japan's biggest bankruptcy case in six years, slumped 82%, bringing its loss this year to more than 99% . Rival Zecs Co. plunged 13% after it said yesterday there are doubts it can remain as a viable business. Nikon Corp., which also makes chip-etching machines, rose 3.8%, the highest since Jan. 4, while Elpida Memory Inc., Japan's largest memory chipmaker, jumped 6.3%.