Here is a the weekly recap
Amid ongoing concerns about the health of the financial sector and the overall economy, the stock market finished the week slightly higher.
The week, however, began on a negative note as the market lost ground Monday amid continuing credit market turmoil.
It was a particularly dark day for E*Trade Financial (ETFC).
The online brokerage said late last Friday that it expects more write-downs on its holdings of mortgage-backed securities and would no longer meet its previous earnings forecast. Its shares plunged nearly 60% during the session. A Citigroup analyst suggesting there was a 15% probability of a bankruptcy filing exacerbated the selling pressure. E*Trade called the suggestion "irresponsible."
In other news, IBM (IBM)
announced a $5 billion all-cash offer to acquire Canadian software company Cognos (COGN),
reflecting ongoing consolidation activity in the space, while private equity giant Blackstone Group (BX)
reported lower third quarter earnings as charges related to its IPO weighed on results.
Snapping a four day losing streak, stocks rebounded sharply on Tuesday, led by strong gains in technology shares and reassuring words from Goldman Sachs' (GS)
chief executive that the investment bank won't be announcing a write-down like many of its peers.
Retailers also performed well during the session, following a stronger than expected earnings report and outlook from Dow component Wal-Mart Stores (WMT).
A drop in oil prices Tuesday also helped ease concerns about consumer spending ahead of the holiday shopping season.
The recovery in stocks was short-lived, though, as persisting credit worries once again pressured shares on Wednesday.
London-based HSBC Holdings PLC (HBC),
for its part, said it will take a $3.4 billion charge in the third quarter due to mounting losses in its HSBC Finance consumer lending business in the U.S., which continues to struggle with the fallout from the housing slump.
That helped offset some mildly encouraging economic news. The October Producer Price Index was up 0.1%, versus an expected 0.3% increase, and core prices were unchanged from the previous month. Meanwhile, October retail sales rose a modest 0.2%, but were in line with expectations and didn't decline as many had feared.
Stocks continued their slide on Thursday, as investors weighed a steady read on consumer inflation and a drop in oil prices against ongoing credit market worries. Financial stocks were hit hardest, giving back much of the gains from Tuesday's rally with concerns surrounding Fannie Mae's (FNM)
accounting contributing to the sell-off.
The Consumer Price Index rose 0.3% in October, matching last month's rise and meeting economists' expectations. The core CPI was up 0.2%. That was also in line with expectations and leaves the year-over-year increase at a still low 2.2%. Meanwhile, a report by the Philadelphia Federal Reserve Bank showed an unexpected rise in its November index of manufacturing conditions in the region.
A disappointing report from Applied Materials (AMAT)
weighed on technology stocks, while mixed results from Petsmart (PETM)
and a lowered outlook from J.C. Penney (JCP)
added to worries about consumer spending and a weak retail environment.
Adding to investors' worries, the Federal Reserve
reported Friday that industrial production fell 0.5% last month, due in part to continued problems in automotive and housing-related industries. That was much weaker than the 0.1% gain that had been expected.
Meanwhile, a profit warning from FedEx Corp. (FDX)
and disappointing outlooks from Starbucks (SBUX)
and Kohl’s Corp. (KSS)
further dampened the outlook for the economy and weighed on investor sentiment. Despite these issues, a rally in the final half hour enabled the market to close the week on a positive note.