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Oct 23, 2009

Market Watch?s top stories of the week

MarketWatch's top stories of the week

By MarketWatch

SAN FRANCISCO (MarketWatch) -- U.S. stocks had a roller coaster end to the week, falling enough on Friday to undo healthy gains from earlier in the week. The main driver in the market has been earnings and even though a lot of companies are beating analyst expectations with ease, very few are reporting results that show any true strength.

Friday, a lot of the decline was attributed to a drop in oil and other commodities, which was triggered by a rise in the dollar. Stocks in the energy, materials and industrials sectors led the way lower.

On Friday, the Dow Jones Industrial Average (.DJI) fell 109.13 points or 1.1% to close at 9,972.18. For the week the index fell 0.2%. The Nasdaq Composite Index (.COMP) dropped 10.82 points or 0.5% to close at 2,154.47 on Friday and logged a weekly decline of 0.1%. The broader Standard & Poor's 500 Index (.SPX) fell 13.31 points or 1.2% on the day to close at 1,079.60 for a weekly loss of 0.7%.

Check out MarketWatch over the weekend for all the news you need to keep up. Our weekend features include a look at how to use exchange traded funds to invest in oil and our stockpicker of the quarter. We'll also have a look at commercial real estate trends in the United Kingdom.

Meanwhile, please take a moment to view our weekly preview videos.

 Asia's Week Ahead: Awaiting Data Flood

 Europe Week Ahead: Oil Majors and SAP in Focus

-- Christopher Noble , assistant managing editor

Predictions of a pullback

U.S. stocks staged a sharp late-session drop in the last 40 minutes of trade Wednesday, erasing a day of modest gains. That move dovetailed with calls from analysts saying equities' seven-month climb left the market vulnerable for a fall. Even analysts who believe the market will continue its climb as the year wraps up said a pullback was due. Read more about their predictions .

Strength in the euro

Europe's single currency traded above the $1.50 level versus the U.S. dollar for the first time in 14 months Wednesday, breaking through an important psychological barrier that will create added heartburn for euro-zone officials worried the strengthening currency will crimp opportunities for an export-led economic recovery. Read more about the euro's move .

Currency 'death spiral'

Greenlight Capital is betting on the possibility of a major currency collapse and a surge in interest rates, the hedge-fund firm's manager David Einhorn said, citing ballooning government deficits in some of the world's most developed countries. Greenlight has been buying physical gold this year because Einhorn is concerned that efforts to save the financial system and fuel economic recovery are undermining the value of such currencies as the U.S. dollar. Read more about his thesis .

Cause for crisis

 See video The prospect of global imbalances, shorthand for the lopsided nature of a world economy in which the U.S. borrows and Asian countries save, is back on policymakers' watch list. Only this time, government officials still cleaning up the past two years' financial and economic crisis have fresh examples of what can happen when the U.S. and other developed economies save little and borrow lots from savings-rich export nations such as China. Read what Federal Reserve Chairman Ben Bernanke said on the matter .

Uncharted waters

One of the biggest IPO stories of the year has been China-based water-treatment-equipment company Duoyuan Global Water, whose success reflects a growing desire among global investors to hold specialized commodities, in particular a commodity -- water. For investors who want to dip into the play, there seven actively managed and exchange-traded funds to choose from, all of which were started in the past two years. Read more about them .

Apple's earnings climb

Shares of Apple Inc. (AAPL) nearly posted an all-time closing high Tuesday, one day after the company posted strong fourth-quarter results that included a 46% rise in earnings due to better-than-expected sales of Mac computers, iPhones and iPods. Whatever concerns about the economy remain, over the past three months, there seemed to be little impact on Apple's largely consumer-driven business. Read more about Apple's results.

Altitude for Amazon

Amazon.com Inc. (AMZN) surged to a new all-time high Friday morning after the online retailer reported a 69% jump in third-quarter earnings and a better-than-expected forecast for the current quarter. A pair of brokers upgraded Amazon before the opening bell, while several others lifted their price targets following what many termed as blowout results for the third quarter. The company beat Wall Street's targets in both earnings and revenue and gave a fourth-quarter forecast that topped expectations as well. Read about Amazon's results .

Valuing Fannie and Freddie

Analysts at Keefe, Bruyette & Woods said this week that the common shares of Fannie Mae (FNM) and Freddie Mac (FRE) are likely worthless, even if the troubled mortgage-finance giants end up being recapitalized by the banking industry. KBW analysts led by Bose George downgraded shares of Fannie Mae and Freddie Mac to underperform from market perform and cut their price target on both stocks to zero from $1. Read about their rationale .

Ending incentives

The Federal Reserve moved this week to get banks to remove incentive compensation packages that might put the institution at risk. If the pay package is found to create too much risk for the bank, under the proposal the Fed could take enforcement action if the plan is not amended. Incentives played a key role in the run-up to the financial crisis. Read more about the proposed changes .

The 'inside' path to profit

The insider-trading case against Raj Rajaratnam, founder of the Galleon Group hedge fund, is more proof that, as much as Wall Street likes to tout the financial prowess of its best and brightest, the reality is something far less dazzling. And now Rajaratnam has been charged with one of Wall Street's simplest and oldest shell games: trading on nonpublic information. We've lost even before the amusement begins. The question is: Why do we keep coming back? Read David Weidner's column .

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From the desk of Nick Nicolaas

 As every Friday our friend Nick Nicolaas has sent us Adam Hamilton  Zeal Intelligence Newsletter on the Mining Interactive Websiite. Thanks Nick for sharing with us this valuable information.

Fernando Guzmán Cavero

FGC BOLSA - FGC FINANCIAL MARKETS





Dear Friends:

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Mining Interactive “Ahead of the Pack”
Nick L. Nicolaas
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