Weekly Wrap

Here is a look at Briefing.com's Weekly Recap:

For the first time in four weeks the market lost ground. To be exact, the S&P 500 declined 1.8%.

The pullback in many respects was not unexpected. After all, with the S&P 500 up 11.0% since the Bear Stearns bailout in mid-March, many participants believed it was due to take a breather.

That feeling was on the mark, even if few people predicted the specific causes for the selling pressure, which were rapidly rising oil prices, a faltering financial sector and an inability to hold above 1400 on the S&P, which has been viewed as a key technical point.

Oil dominated the headlines throughout the week with crude futures closing at new record highs each day. The final settlement of $126.13 per barrel marked an 8.4% gain for the week. That move was underpinned by weakness in the dollar, supply concerns and speculative buying interest as momentum investors chased returns.

The spike in oil prices took its toll on sentiment and knocked the wind out of the market's sails. Its effect was punctuated at the end of the week when FedEx (FDX) issued an earnings warning late Friday that was pinned on rising fuel costs.

By the same token, the financial sector also had a heavy hand in the action, falling 6.3% for the week following a batch of ugly earnings reports from the likes of Fannie Mae (FNM), UBS (UBS) and Dow component American International Group (AIG).

The latter company helped grease the selling wheels on Friday after reporting a $7.8 billion net loss for its first quarter and revealing that it intends to raise $12.5 billion in new capital. Earlier in the week Fannie Mae said it would be raising $6 billion in new capital.

Separately, Citigroup (C) announced Friday that it would be pursuing a plan to sell $400 billion in noncore assets over the next two to three years. Although this initiative is deemed to be necessary by many pundits, it, along with AIG's news, exposed the ongoing challenges that continue to confront financial companies in their bid to restore earnings power in the aftermath of the credit market mess.

Dow component Disney (DIS) for its part demonstrated this week that it still has ample earnings power. The entertainment giant reported a 35% increase in fiscal second quarter earnings per share on growth in each of its business segments. Disney ended the week 2.4% higher, but its influence was mostly company-specific.

Cisco (CSCO) was the other heavyweight that reported earnings this week. It posted a 12% increase in fiscal third quarter earnings per share and reaffirmed its long-term growth targets. Still, its news failed to advance the market given the acknowledgment that its U.S. business is soft and the understanding that Cisco had gained 12% in the three weeks leading up to its report.

There wasn't a lot of economic data this week, yet the majority of the data released provided relatively good news.

The ISM Services, Q1 Productivity, Initial Claims and Trade Balance reports were all better than expected. Pending home sales for March fell 1.0%, which was in line with estimates, while consumer credit in March expanded to $15.3 billion from $6.5 billion in February.

Naturally, with the spike in oil prices and the jump in consumer credit, concerns persisted about the state of the consumer. However, the April same-store sales results reported Thursday showed consumers are still alive and kicking. Granted their preferences have shifted to lower price points, and many have cut back on discretionary purchases, yet even Wal-Mart reported it is still seeing strength in sales of flat-panel TVs and video games.

Next week the Retail Sales report for April will be a standout on a very busy economic calendar, which will also feature CPI, industrial production and housing starts data for April.