Weekly Recap

Here is a copy of Briefing.com's Weekly Wrap:

The major averages finished the week lower, as investors digested some disappointing earnings results and ongoing concerns about the economy and the health of the sub-prime mortgage lending, following the market's recent strong gains.

Corporate financials took center stage in the past week, with second quarter earnings season now in full swing.

Overall, the reports have been moderately good, but not outstanding, with large multinational companies faring the best because of foreign exposure as well as substantial share buybacks.

Twelve Dow components highlighted the lengthy earnings calendar, which also included reports from other luminaries such as Yahoo! (YHOO), eBay (EBAY), Google (GOOG), Abbott Laboratories (ABT), Harley-Davidson (HOG), and Southwest Airlines (LUV).

Also reporting during the week were a host of financial companies, including KeyCorp (KEY), Merrill Lynch (MER), JPMorgan Chase (JPM), Washington Mutual (WM), Citigroup (C), Bank of America (BAC), and Wachovia (WB). Despite some better than expected results, however, lingering concerns about sub-prime lending held the sector back.

Both the Dow Jones Industrial average and the broader S&P 500 index closed at record levels on Thursday, led by strong gains in the Technology sector. Strength in the semiconductor sub-group, in particular, was weakened by a disappointing report from Intel (INTC) mid week, but reinvigorated by IBM (IBM), which posted better than expected results, to lead the sector.

The markets reversed course on Friday, however, as lackluster results from blue chips Caterpillar (CAT) and Google unnerved investors. An inline report from Microsoft (MSFT), following several strong quarters that exceeded analysts' estimates, also weighed on sentiment and prompted shares to retrace their gains.

The flurry of earnings news during the week was also accompanied by Fed Chairman Ben Bernake's semiannual report to Congress, in which he warned that weakness in the housing market could hurt economic growth. Ongoing concerns about the housing market and the health of sub-prime loans has been a major concern in recent weeks, and continues to act as a headwind for the market.

In terms of economic data, the June core PPI rose 3%, according to a report from the Labor Department. That was slightly higher than the 0.2% gain economists were expecting, and raised some inflationary concerns. The core CPI was up 0.2% last month, in line with expectations.

Meanwhile, Housing Starts rose last month, but Building Permits tumbled. June Housing Starts were reported at a 1.467 million annual rate, just above the 1.450 million rate that was expected. Housing permits plunged 7.5% in June to just a 1.406 million annual rate, versus the consensus estimate of a 1.490 million rate, reflecting the bleak outlook for the housing market.