Stock Market News for May 17, 2010 - Market News

Concerns that the debt crisis in Europe could slow the global economic rebound overshadowed stronger-than-expected reports on retail sales and industrial production and sent U.S. stocks sharply lower on Friday.  Investors also questioned the efficacy of frugality measures being instituted by financially troubled Portugal and Spain.

Nevertheless, all three major stock indexes managed to close up more than 2% on the week, thanks largely to Monday’s bailout-induced rally.  The broader S&P 500 index dropped 1.9% on Friday, paring its weekly advance to 2.2%.  The Dow average closed off 163 points, or 1.5%, limiting its weekly gain to 2.3%.  The Nasdaq composite index led with a 2% drop but gained 3.6% on the week, highest among the three major indexes.  The market’s fear gauge, the Chicago Board Options Volatility Exchange, rose 4.56% to 31.24.    

Asian markets started the week on a down note, with the Hang Seng index in Hong Kong dropping 2.1% and the Nikkei 225 stock average in Japan closing off 2.2%.  However, the Shanghai Composite index was the most notable decliner in the region, plunging 5.1% to a 12-month low amid concerns that further tightening measures would hamper China growth.

This morning the euro, the currency that 16 European countries share, dropped to a four-year low against the dollar amid renewed fears about the strength of the European economy.  Investors remain concerned that tough austerity measures, if implemented, could derail the economic growth in eurozone and, in turn, hurt the global economic recovery.  The euro fell to as low as $1.2237 early Monday.  US stock futures were trading in a narrow range ahead of the opening bell.  Dow Jones industrial average futures were up 13 points, or 0.1%, to 10,622.  Standard & Poor's 500 index futures rose 2.70 points, or 0.2%, to 1,138.20, while Nasdaq 100 index futures rose 4.25 points, or 0.2%, to 1,914.00.

While gold continued to soar and hit a record intraday high of $1,249.70 before falling near $1,230 Friday, the euro suffered due to uncertainties about Europe’s ability to finance large deficits and keep the sovereign debt crisis from spreading.  The currency dropped to its fresh 18-month low against the dollar.  Oil prices continued lower, falling below $72 per barrel. 

While the flow of interims is abating, key corporate results are due from Home Depot HD, Wal-Mart WMT, Hewlett-Packard HPQ, Target TGT, Staples SPLS and Dell DELL.