Weekly Recap

Here is a Briefing.com's Weekly Wrap:

Stocks finished higher for the week, leaving the Dow Jones Industrials and broader S&P 500 at record levels, despite lingering concerns about the subprime mortgage market and the health of the economy.

The aforementioned concerns were based primarily on the lowered outlooks from Home Depot (HD) and Sears Holdings (SHLD), as well as a warning by Standard & Poor's and Moody's Investors Service credit rating agencies that they are downgrading ratings on several hundred securities involving sub-prime debt.

Those factors combined led to a very weak market on Tuesday that saw the Dow suffer a triple-digit point loss. The subprime concerns served as the main source of selling inetrest, which we felt was overdone relative to the amount of debt that was going to be affected by the downgrades.

The market managed a modest recovery on Wednesday, but it was on Thursday that the doors were blown off as the major indices soared in response to news that metals giant Rio Tinto Group (RTP) made a white knight bid of $38.1 billion, or $101 per share, in cash for
Alcan (AL) batch of better than feared same-store sales reports also aided in the rally effort.

Most notably, Wal-Mart (WMT), the world's largest retailer, beat analysts' expectations with a 2.4% rise in same store sales.

Just as Tuesday's selloff was overdone, however, so too was Thursday's rally.

The Rio Tinto bid for Alcan was indeed a bullish catalyst, but the same-store sales data weren't nearly as strong as the market reaction suggested. Nonetheless, bulls ran with the news given the negativity ahead of the reports and prompted a wave of short-covering activity that boosted the Dow and S&P into record territory and encouraged an asset shift out of Treasuries and into stocks.

Friday brought a mixed session of sorts as weaker than expected retail sales data for June were offset by a stronger than expected consumer confidence report for July and a reassuring earnings report, and outlook, from General Electric (GE).

All in all, the week ended on an encouraging note for the bulls as the market remained resilient to profit taking efforts following Thursday's rally that saw the Dow record its biggest percentage gain in nearly four years.

long GE in client accounts