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Market Update by Miriam Gottfried (Author Archive)
Rocky Week Ends With a Fizzle
News at a Glance
- Flat Friday: Major indexes end wild week with a bore.
- Saving More: Personal income rises more than spending.
- Oil Eases: Crude futures return below $70 a barrel.
- Brighter Mood: June Consumer Sentiment revised up.
The Lowdown
A bumpy week on Wall Street came to an anemic finish Friday.
Stocks finished mixed, as traders showed little interest in the latest economic data after a week of big shifts. The Dow Jones Industrial Average lost 34 points to finish the week at 8438. The Nasdaq picked up 9 at 1838, and the S&P 500 slipped a point to 919.
Friday's session capped a week that included two triple-digit shifts in the Dow. Monday's selloff outweighed Thursday's rally.
On Friday, Commerce data showed a big bump in personal income in May was met with a relatively small increase in spending, eliciting some concern that consumers are bringing more of their money to the bank than to the store. Personal income rose 1.4% last month, while spending rose just 0.3%.
The news for the consumer was not all bad. The June reading of the Index of Consumer Sentiment was revised up to 70.8.
In Europe, the broader markets rose Friday with banks, including HSBC (HBC), BNP Paribas (BNP) and Credit Suisse (CS). Asian markets also saw gains.
Crude oil prices slipped with the broader market, as investors responded to mixed signs about the economy. By 4:15 p.m., crude traded down 85 cents at $69.38 a barrel.
The dollar fell again Friday, as China sought a new currency. The greenback is on track for its biggest weekly loss against the euro in a month.
Corporate News
- UBS (UBS) raised about $3.5 billion by selling shares to boost capital and said it expects a second-quarter loss. The European bank with the biggest credit-crisis losses announced it sold the 293.3 million shares to a “small number of institutional investors” in order to boost confidence.
- Japanese authorities ordered Citigroup (C) to suspend all sales operations at its retail banking arm for a month after the company failed to take steps to curb money laundering. This is the second time in five weeks that the Financial Services Agency has cited Citi for inadequate oversight of possibly criminal transactions. Citibank is a relatively small player in the Japanese consumer market. It will suspend sales from July 15 through August 14.
- Qantas Airways said Friday it has cancelled delivery of 15 of Boeing (BA) 787 Dreamliner aircraft and deferred orders for another 15. The Australian carrier cited a dramatically changed operating climate and said the cancellation would save it about $3 billion. Earlier in the week, Boeing said it had again postponed the maiden flight of the Dreamliner again after having pushed it back by two years.
The Economy
- Personal income increased $167.1 billion or 1.4% in May, up from a 0.7% increase in April, the Commerce Department said. Consumer spending rose 0.3% in May, after a flat reading in April. Analysts had expected personal income to rise 0.3%, compared to a 0.5% increase in April. Spending was expected to rise 0.3%. The rise in spending may suggest the government's economic stimulus plan is having an effect. The PCE deflator, a measure of inflation, rose 0.1% from May 2008, which was in line with economists' expectations. REPORT
- The June reading of the Index of Consumer Sentiment was revised to 70.8, up from a prior estimates of 69.0 and a May reading of 68.7, Reuters and the University of Michigan said. Analysts had forecast an index value of 68.8. STORY
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