The fiscal stimulus package dominated the US market for the entire week that ended on Friday, 13 February, 2009. Capitol Hill remained quite busy with prominent personalities testifying before Senate one another. Market did not show much enthusiasm to all these except for a couple of days and ignored better than expected economic data. Though the stimulus package got passed at the end with a vote on Friday evening, Wall Street registered substantial losses for the week.
The Dow Jones Industrial Average lost 430 points (5.2%) for the week to end at 7,850. Tech - heavy Nasdaq lost 57 (3.6%) to end at 1,534. S&P 500 lost 42 (4.6%) to end at 826.
While the earning reports during the week were mainly disappointing in nature, the economic reports were mainly a mixed bag.
During the week, Treasury Secretary Geithner announced a new financial rescue plan and testified before lawmakers. Major banking CEOs went before the House Financial Services Committee and testified regarding their TARP plan. Fed Chairman Bernanke went before the same committee to comment on the Fed's efforts to foster liquidity in financial markets.
Among major economic news during the week, jobless claims for the week ending 7 February, 2009 totaled 623,000, which is a bit more than expected, but down slightly from the prior week. Continuing claims stand at 4.81 million. Both initial claims and continuing claims stand at multiyear highs and reflect ongoing layoffs and challenging job conditions.
On the other hand, retailers registered an increase in sales after quite a long time on a yearly basis. Sales in January registered 1% increase, which witnessed an increase after seven months of drop. But market ignored these data and instead focused on the latest developments on stimulus plan.
During the week, Pepsi and Coco Cola checked in with better than expected earning reports.
In the US market on Friday, 13 February, 2009, stocks ended lower. The Dow Jones Industrial Average ended lower by 82 points at 7,850, the Nasdaq closed lower by 7 points at 1,534 and the S&P 500 closed lower by 8 points at 826.
The financial sector acted as the laggard in the market on Friday. Investors seemed to remain largely unimpressed by the $789.5 billion economic stimulus bill, which was passed by vote this weekend. The bill aims to spur long-term growth instead of giving the economy a sudden short term push.
Microsoft and Texas Instruments were the stocks that supported the technology sector. Texas Instrument got an upgrade while Microsoft announced that it is going to open several stores.
For the year 2009, Dow, Nasdaq and S&P 500 are down by 10.6%, 2.7% and 8.5% respectively.
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