Weekly Wrap

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

U.S. stocks began the week on solid footing, ahead of the Federal Reserve's latest policy decision, but stumbled as the week progressed amid escalating concerns about the beleaguered financial sector and ongoing credit issues.

After trading slightly higher on Monday, based on the belief that the Fed would cut its key interest rate, the major averages fell on Tuesday following relatively disappointing earnings guidance from Dow component Procter & Gamble (PG).

Shares of Merrill Lynch (MER) also fell after the investment bank's chief executive Stan O’Neal resigned – just days after it posted a $2.3 billion third quarter loss and recorded a write-down of nearly $8 billion for collateralized debt obligations and U.S. subprime mortgages.

Meanwhile, a government report showed consumer confidence declined to a two-year low in October, raising doubts about the upcoming holiday shopping season and exacerbating the market's decline.

As widely expected, the Federal Reserve cut both the fed funds and discount rates by a quarter percentage point on Wednesday to 4.5 percent and 5.0 percent, respectively. The decision helped offset growing concerns about the housing market's downturn and the fallout from the summer's credit crisis. Investors cheered the news, sending stocks higher during the session.

Adding to the positive tone, government data showed strong underlying trends in the economy, with third quarter GDP rising a stronger than expected 3.9 percent and the GDP deflator (inflation measure) up at just a 0.8 percent annual rate. The data also helped offset a disappointing read on regional manufacturing activity, as the Chicago PMI dipped to 49.7 from 54.2 in September. A reading above 50 indicates growth.

Reversing the previous session's gains, stocks ended sharply lower on Thursday, with the Dow Jones Industrials plunging more than 360 points on renewed concerns about the fallout in the credit markets.

For its part, Swiss banking giant Credit Suisse (CS) reported large write-downs during its third quarter and a CIBC analyst downgraded shares of Dow component Citigroup (C) due to capital concerns that she said could lead the bank to cut its dividend.

Also, Exxon Mobil (XOM) reported a 10 percent drop third quarter profit and missed analysts' expectations by four cents. Separately, the Institute for Supply Management's manufacturing index came in at a lower than expected 50.9 for October, piquing concerns about sluggish manufacturing growth.

While investors remained cautious about the outlook for the economy, stocks closed higher on Friday in choppy trading following a stronger than expected employment report and amid continued concerns about the financial sector.

The Labor Department reported non-farm payrolls rose 166,000 in October, compared with economists' forecast for an increase of 80,000. The September increase in payrolls was revised slightly lower, but does not negate the strong October gain. The unemployment rate remained at a low 4.7%