Weekly Wrap

Here is a copy of the weekly recap from Briefing.com:

Trading in erratic fashion, the major averages finished the week higher, as relatively upbeat earnings for the third quarter overshadowed ongoing concerns about credit-related problems and the overall economy.

Stocks rose on Monday, after last week’s sharp sell-off, with bargain hunters picking up shares on the cheap, particularly in hard-hit areas such as homebuilders, banks, and retailers. Stronger than expected earnings from Dow component Merck & Co. (MRK) also helped fuel a recovery in the Dow Jones Industrials and the broader market.

With upbeat earnings from Apple (AAPL) and blue chip companies DuPont (DD) and American Express (AXP), stocks rallied to close higher on Tuesday. The market struggled early in the session on fresh concerns about the consumer outlook, after discount retailer Target Corp. (TGT) lowered its October same store sales guidance and Wal-Mart Stores (WMT) cut its capital spending forecast for the year. However, led by enthusiasm for technology companies, stocks managed to end the session higher.

On Wednesday, the market plunged due to more disappointing news on the housing front and a sharp third quarter loss posted by banking industry bellwether Merrill Lynch (MER), before rebounding late in the day.

With the housing market still in a sharp downturn, the National Association of Realtors reported that existing home sales fell 8% in September to a low 5.04 million annual rate and median home price slipped 4.2% from a year ago. Expectations were for a 5.25 million annual rate.

On the earnings front, Merrill Lynch reported a $2.3 billion loss in the third quarter and said it was taking a larger than expected write-down of $7.9 billion on its collateralized debt obligations and U.S. subprime mortgages.

In other corporate news, Amazon.com (AMZN) reported higher earnings and revenue, but still failed to impress investors, who were concerned about shrinking margins. They pushed shares nearly 14% lower on the news. Dow component Boeing Co. (BA), meanwhile, surprised investors when it reported stronger than expected results and raised its outlook for the year.

Despite a late-day rally, the market edged slightly lower on Thursday as reports on new home sales and durable goods orders, as well as a batch of mixed earnings, weighed on investor sentiment.

The Commerce Department reported new home sales rose 4.8% in September from the August level. However, the latest figure showed an increased only because the last month's level of sales was revised sharply lower to a 735,000 annual rate from an originally reported 795,000.

Meanwhile, it was reported that durable goods orders fell 1.7% in September, after a 5.2% decline in August, raising concerns about business spending.

Finishing the week on a strong note, stocks traded higher on Friday as investors found solace from strong earnings from Microsoft (MSFT) and an optimistic outlook from Countrywide Financial (CFC), which sent its stock 32% higher.

Microsoft for its part recorded a 23% increase in third quarter earnings, boosted by strong sales of Windows, Office, and the new Halo 3 video game. Shares of the software giant climbed more than 9% on the news and provided support for the overall market.

Hurt by escalating mortgage defaults and recent credit market problems, Countrywide reported a $1.2 billion loss in the quarter. However, the nation's largest mortgage lender said it would turn a profit in the fourth quarter despite continued weakness in the housing market and elevated credit costs in near term. The outlook was reassuring for investors and prompted a short-covering rally in the stock.

long AAPL, MSFT