MarketWatch Top 10 stories, April 18-22
Many prominent companies reported quarterly results during the week, including Apple and some of the big banks. Financial companies were still showing scars from the recession while many tech companies were sorting out the impact of the massive earthquake that struck Japan last month.
The Dow Jones Industrial Average (DJIA) closed the shortened week on Thursday with a gain of 52.45 points or 0.4% at 12,505.99. For the week the Blue Chip index added 1.3%. The Nasdaq Composite (COMP) ended Thursday up 17.65 points or 0.6% at 2,820.16 making for a weekly gain of 2%. The benchmark Standard & Poor's 500 (SPX) gained 7.02 points or 0.5% on Thursday to close at 1,337.38. For the week the index was up 1.3%.
Also, please be sure to watch our Week Ahead videos from the U.S., Europe and Asia.
U.S. Week Ahead: Fed's new way to get the message out
Europe Week Ahead: BP, Ericsson earnings
Asia Week Ahead: Clues from Japan
— Christopher Noble , assistant managing editor
In a move Monday that roiled markets, Standard & Poor's cut its ratings outlook on the U.S. to negative from stable, lighting a fire under Washington's deficit-reduction debate. The rating agency effectively gave Washington a two-year deadline to enact meaningful change, just days after House Budget Committee Chairman Paul Ryan and President Barack Obama outlined their plans for slashing debt. S&P nonetheless kept its highest rating, AAA, on the U.S. Read more about S&P's outlook.
Handily topping Wall Street forecasts, Apple Inc. (AAPL) reported a sharp 95% surge in second-quarter profit, boosted by strong sales of the iPhone and Mac computer line. Sales of Apple's latest product — the iPad 2 — remain constrained by production limits, but the iPhone was the main driver of earnings growth in the quarter. Read about Apple's results.
Intel Corp.'s (INTC) surprising earnings beat raises a question: Why was Wall Street so wrong on the chip maker's first quarter? Analysts agreed that a key reason for the surprise was conflicting views on trends in the personal-computer market. Read more about Intel's upside surprise .
Solid earnings by big tech companies this week ignited technology shares, dispelling concerns about the Japanese earthquake's impact on future earnings. But can the tech rally lift the financial-services sector out of the doldrums, or will persistent weakness in banks and on Wall Street hobble a U.S. economy that appears ready to run? David Callaway's betting on the banks playing bogeyman. Read Callaway's column .
BP PLC (UK:BP.) (BP) has filed lawsuits against Transocean Ltd. (RIG), Halliburton Co. (HAL) and Cameron International Corp. (CAM), three of the main contractors it worked with on the Gulf of Mexico rig that blew up last April, setting off the worst oil spill in U.S. history. Read more about BP's legal battle .
Restructuring, buybacks or bridge loans. When it comes to Greece, Europe faces a number of choices, none of them pretty, economists say. A controversial 110-billion euro ($160.7 billion) bailout program was put in place a year ago next month. But expectations that the move to help the debt-strapped nation would allow Greece to return to credit markets next year, as originally planned, now appear dashed. Read about Greece's restructuring choices.
Japanese earnings season kicks off in earnest next week, with strategists hoping for signs of improvement even as they brace themselves for possible bad news due to last month's disasters. Instead of cutting their forecasts, many companies will likely hold off on releasing any guidance at all for the business year that began this month, as they continue to gauge the impact of the March 11 earthquake, tsunami and subsequent power shortfalls and production shutdowns. Read about what's ahead for Japanese companies.
An index of manufacturing sentiment in the Philadelphia area slumped in April to a five-month low, showing growth at a much slower pace, according to a survey released this week. The Philadelphia Fed's index of current activity tumbled to 18.5 in April after a March reading of 43.4, its highest level since January 1984. Economists polled by MarketWatch had expected the gauge to fall to 35.5 in April. Read about the Philly Fed.
U.S. builders started construction on homes at a faster rate in March and permits to begin new work also rose, but the home-building industry remains mired in its worst slump ever. Housing starts rose 7.2% in March to an annual rate of 549,000, the Commerce Department said. Economists surveyed by MarketWatch had expected housing starts to climb to 520,000 in March on a seasonally adjusted basis. In a normal economy, however, more than 1 million new homes are usually built each year. Read more about housing data.
In a world in which debt is a four-letter word, paying off the home mortgage could be a wise move for many people, providing they take the time to do the math or find a financial adviser who can help. It's not for everyone, however, and is a step that should not be taken without a lot thought about what your priorities and goals are and what stage of life you're in. Read more about whether it makes sense to pay off your mortgage.