Stock Market News for July 19, 2010 - Market News

Consumers’ growing pessimism about the economic recovery shook investors’ confidence on Friday, sending major averages off at least 2%, even as some companies reported better-than-anticipated quarterly numbers.  Financials led on the downside after some big names from the sector posted weaker-than-expected quarterly revenues.

The decline was broad based and all thirty DJIA components ended in the red.  Even relatively defensive plays such as AT&T T and Procter & Gamble PG were not spared.  Big firms such as General Electric GE, Bank of America BAC and Citigroup C reported better-than-expected quarterly earnings but their revenues fell.  Goldman Sachs GS was a notable gainer after the firm announced a $550 million settlement with the U.S. Securities and Exchange Commission.

The Dow Jones industrial average dropped more than 261 points, or 2.5%, on Friday.  The tech-heavy Nasdaq led with a drop of 70 points, or 3.1%, and the broader S&P 500 index fell 32 points, or 2.9%.  The slump Friday was enough to send all three major indexes into the red for the week, with the broader S&P 500 index leading the drop.  On the week, the Dow average fell 1%, the S&P 500 dropped 1.2% and the Nasdaq retreated 0.8%.    

Gold and crude prices weakened.  Flight to safety sent treasury prices higher, sending corresponding yields lower.  The yield on the benchmark 10-year Treasury note fell to 2.93 percent from 3.00 percent late Thursday.

Among technology names, Google GOOG disappointed with a 6% drop Friday after the search giant posted weaker-than-expected quarterly earnings.

This week sees a broad range of companies reporting their earnings numbers, including today's numbers from IBM IBM after the close, as well as from Texas Instruments TXN, Hasbro HAS, Halliburton HAL and Delta DAL. On Tuesday, earnings are due from Goldman Sachs GS, as well as Apple AAPL, PepsiCo PEP, State Street STT and Yahoo YHOO.  Wednesday sees such names as Coca-Cola KO, Morgan Stanley MS, United Technologies UTX, Wells Fargo WFC, US Bancorp USB, EBAY EBAY, and Qualcomm QCOM. Thursday's corporate agenda includes numbers from 3M MMM, Amazon AMZN, American Express AXP, AT&T T, Caterpillar CAT, Microsoft MSFT, Nokia NOK Travelers TRV, UPS UPS, and SanDisk SNDK. On Friday, numbers are due from Honeywell HON, McDonalds MCD, Verizon VZ and Ford F.

This week, however, assumes importance for reasons more than one.  Besides earnings results from a number of key companies, the Fed Chairman Bernanke’s two-day testimony on the Hill beginning Wednesday is expected to be parsed for any stimulus-related plans.  Also, Friday sees the results of stress tests of about 91 European financial institutions, even as questions about lack of transparency in the method of testing begin to gain ground.