Traders-Blog.com

Stocks closed mixed with all three major averages taking weekly losses due to concern over the outlook for interest rates and mounting fear of a sharper than expected slowdown in economic growth. Today, tech shares closed higher and blue-chips closed lower, at the end of a choppy session that was driven mostly by fluctuating oil prices.

Today, the Dow Jones industrial average closed down 20.41 or 0.18% to 11,284.05, the broader Standard & Poor’s 500 closed down 0.97 or 0.07% to 1,295.09, and the Nasdaq composite index closed up 3.18 or 0.15% to 2,140.29. For the week, the Dow ended down 0.9%, the S&P closed lower 0.05% and the Nasdaq lost 1.1%.

Market breadth was positive and trading volume was light. On the New York Stock Exchange, winners beat losers by 16 to 15 on volume of 1.06 billion shares. On the Nasdaq, advancers narrowly topped decliners 15 to 13 as 1.30 billion shares changed hands.

Federal Reserve chief Ben Bernanke confined his speech to the subject of global economic integration at the central bank’s annual Jackson Hole retreat in Wyoming. He said that economic policymakers have to make sure that enough segments of society feel the benefits of globalization in order to guard against protectionism. Investors were disappointed as they had been expecting that he would also address the issues of inflation and economic growth.

Uncertain future is making investors nervous and the markets are behaving erratically. Investors have growing evidence showing the housing market is slowing down, but they could, at the same time, be putting too much weight on what that means for the economy. Adding to concerns, new orders for U.S. made durable goods tumbled 2.4% in July against the expected 0.7%. There is adequate evidence that the economy is slowing down, but it’s not clear that it’s slowing enough to stop inflation. At the same time, there is also the problem that the economy is slowing enough to hurt corporate earnings.

Stock of Ford Motor Co closed up 3.1% to $8, after Robert Rubin, a senior Citigroup Inc. executive, resigned from the automaker’s board of directors, on which he had served since 2000. The resignation is to avoid any questions of a conflict of interest, since Ford is undergoing a strategic review and Citigroup has a broad relationship with the automaker. Ford is looking to sell its luxury brands, including Jaguar and Land Rover. Additionally, it may be thinking of joining a Renault-Nissan alliance and that the Ford family may be considering taking the company private. As a reaction, stock of Citigroup closed down $0.08 to $48.64.

Stock of Toyota Motor Co. fell 2% to $106.12 after a Wall Street Journal reported that it may delay introducing some new models by as much as half a year in order to deal with quality problems that have arisen in the U.S. and Japan. This has dealt a blow to the Japanese car maker’s reputation for reliability. The company is recalling more than 20,000 cars in China because of a windshield problem.

U.S. light crude oil for October delivery added 15 cents to settle at $72.51 a barrel on the New York Mercantile Exchange. Futures rallied as a tropical depression over the Atlantic has the potential to strengthen and reach the Gulf of Mexico, holding out the potential to disrupt production.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
30-day risk-free trial