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This was a week of losses for the market as a spike in oil prices, worries over inflation, and rising interest rates decreased confidence in investors about the outlook for the economy. The Dow fell 77.15 points to close at 10,774.36. Besides, both the Nasdaq and the S&P fell today. The Nasdaq fell 18.12 points to close at 2,041.60, while the S&P closed at 1,200.08, after falling 9.17 points.

According to Robert Pavlik, portfolio manager at Oaktree Asset Management, the poor performance of the stock market this week was due to “the price of oil, a weaker dollar, and Treasury yields backing up to 4.60 percent.” Among the Dow components, American International Group (AIG), Intel (INTC), and Hewlett-Packard (HPQ) were the worst performers. On the other hand, Honeywell International (HON), Exxon Mobil (XOM), and Alcoa Corp (AA) were among the blue-chip barometer’s best performers.

According to the Commerce Department, the U.S trade deficit widened by 4.5 percent in January to a seasonally adjusted $58.3 billion, which is the second highest in record. Besides, imports rose 1.9 percent to a record $159.1 billion, while exports gained 0.4 percent to $100.8 billion. Besides, there was a high in oil prices. Crude futures traded higher after falling to a low of $52.50 a barrel. The April contract ended up 89 cents at $54.43 on the New York Mercantile Exchange.

Kmart Holding Corp. surged $14.89, or 13 percent, to $127. UBS AG analyst Gary Balter upgraded Kmart to “buy” from “neutral” and said that shares may reach $160 over the next 12 months. The move powered Kmart’s shares to a peak of $128.88, which is a nearly 15 percent jump before closing today at $127.61, up $15.51. Kmart is expected to complete its buyout of Sears at the end of the month.

U. S. stocks dropped as Intel Corp.’s sales forecast failed to lift computer-related shares. Intel dropped 65 cents, or 2.6 percent, to $24.20 after earlier gaining 1 percent. The stock may had fallen because its 20 percent rally in the past five months already accounted for expectations of accelerated growth. The euro was up 0.1 percent against the dollar to $1.3453, while the dollar traded little changed against the Japanese yen at 103.87 yen.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter