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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.633720 |
| Euro to US Dollar | 1.398406 |
| Japanese Yen to US Dollar | 0.010414 |
| Canadian Dollar to US Dollar | 0.861846 |
All this talk of recession hasn't hit McDonald's (MCD, news, msgs). Not yet, anyway.
With consumers keeping a close eye on their spending, the fast-food chain reported that sales at stores open at least one year rose 5.7% last month from January 2007.
With a 2.2% gain to $55.67 a share on Friday, the stock was the third-best performer of the 30 stocks in the Dow Jones Industrial Average, after Hewlett-Packard (HPQ, news, msgs), up 3.4% to $41.64, and Alcoa (AA, news, msgs), up 3% to $33.76.
Sadly, however, the Dow struggled for most of the day and closed down 65 points, or 0.5%, to 12,182.
McDonald's said sales rose 1.9% in the U.S., thanks in part to its dollar menu, and were better than the company's forecast of a 1.5% increase.
Sales jumped 8.2% in Europe and 7.8% in the company's Asia-Pacific, Middle East and Africa division. Part of those gains were due to a falling dollar, which boosts the value of results from outside the United States.
McDonald's reported flat same-store sales in December.
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The Dow's weakness on Friday extended to the Standard & Poor's 500 Index, which was off nearly 6 points to 1,331.
And it gutted a rally in the Nasdaq Composite Index, which finished the day up 8 points, or 0.3%, to 2,305. The composite had been up nearly 26 points in the morning.
The market slump was due to weakness in financial stocks and rising oil prices. American Express (AXP, news, msgs) was the Dow loser, down 4.4% to $44.40.
Crude oil, meanwhile, rose 4.2% to $91.77 a barrel in New York this Friday. Some delegates of the Organization of Petroleum Exporting Countries said the cartel should cut production to shore up prices. Crude oil is down 4.4% this year.
Also pushing prices higher were concerns that Venezuela might retaliate in some way against ExxonMobil (XOM, news, msgs). The oil giant won court orders freezing the assets of Venezuela's state oil company.
Exxon wants compensation for assets lost when Venezuela appropriated company assets last year as part of President Hugo Chavez's nationalization of several large oil projects.
Exxon finished Friday down 0.2% to $81.71.
| Close for week | Wk. ago close | % chg. | YTD chg. | |
|---|---|---|---|---|
| Dow Jones industrials | 12,182.13 | 12,743.19 | -4.40% | -8.16% |
| S&P 500 | 1,331.29 | 1,395.42 | -4.60% | -9.33% |
| Nasdaq Composite | 2,304.85 | 2,413.36 | -4.50% | -13.10% |
| Russell 2000 | 698.90 | 730.50 | -4.33% | -8.76% |
| Crude oil per barrel | $97.91 | $88.96 | 3.16% | -4.39% |
| 10-yr. Treasury yield | 3.65% | 3.60% | 1.50% | -9.44% |
| Gold per troy ounce | $922.30 | $913.50 | 0.96% | 10.06% |
Amazon.com boosts tech stocks
The Nasdaq had a stronger day than the Dow or S&P 500 because of gains by Apple (AAPL, news, msgs), Microsoft (MSFT, news, msgs), Google (GOOG, news, msgs) and Research In Motion (RIMM, news, msgs). (Microsoft is the publisher of MSN Money.)A $1 billion stock buyback announced by Amazon.com (AMZN, news, msgs) was the main catalyst pushing tech stocks higher.
Stock Chart (Year)
Amazon.com
Shares jumped 3.7% to $73.50 on the news.
Apple jumped 3.5% to $125.48. Microsoft was up 1.6% to $28.56. Research In Motion soared 5.6% to $89.71, and Google climbed 2.3% to $516.69. From an intraday low of $488.52 in the depth's of Tuesday's sell-off, Google rebounded 5.8%.
Yahoo (YHOO, news, msgs) was up 0.5% to $29.20. The Wall Street Journal reported that the company's board of directors met by telephone Friday to discuss its options in the wake of Microsoft's $44.6 billion offer for the company. No decisions were made, The Journal said. The stock is up 52% since Jan. 31, the day before the offer was announced.
There was some bad news in tech land when Dell Inc. (DELL, news, msgs) said it will stop selling most computer systems powered by chips from Advanced Micro Devices (AMD, news, msgs) through Dell's Web site. The decision knocked AMD shares down 3.8% to $6.34 because Dell sells most of its systems from its Web site.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $91.77 | $88.11 | $3.66 | 0.02% | -4.39% |
| Heating oil (per gallon) | $2.5541 | $2.4585 | $0.0956 | 0.77% | -3.60% |
| Natural gas (per million BTU) | $8.3010 | $8.1020 | $0.1990 | 2.81% | 10.93% |
| Unleaded gasoline (per gallon) | $2.3572 | $2.2678 | $0.0894 | 2.08% | -5.36% |
Little confidence in the market
Mostly because of a horrendous sell-off on Tuesday, the Dow finished the week down 4.4%, its worst weekly loss since the week of March 24, 2003, when the blue chips lost 4.41%.The Nasdaq lost 4.5 %, and the S&P 500 Index fell 4.6%. For the year, the Dow is off 8.2%. The Nasdaq is down 13.3%, and the S&P 500 is down 9.3%.
Index Charts (Year)
Dow Jones Industrial Average
Nasdaq Composite Index
Since their Oct. 9 peaks, the Dow and S&P 500 are down 14% ands 15%, respectively. The Nasdaq is off 19% from its Oct. 31 high.
The bottom line on this week: Investors seem to have little confidence in the market. As CNBC's Bob Pisani noted Friday, any rallies came on light trading volume. But when sellers took over, trading volume jumped sharply.
Many investors are overreacting to the possibility of a recession, complained David Kelly, chief market strategist at JP Morgan Funds, on CNBC this Friday. Yes, the economy is softening, he said, and it may be going into a recession. But if there is a recession, he said, it will be modest and short-lived.
Next week the market faces some important earnings reports, a number of options expirations and Senate testimony from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson.
Among the most closely watched reports will be those from Applied Materials (AMAT, news, msgs), General Motors (GM, news, msgs) and Schering-Plough (SGP, news, msgs) on Tuesday, MGIC Investment (MTG, news, msgs) on Wednesday, and UBS AG (UBS, news, msgs) on Thursday.
AutoNation hit by slowdown
The weakening economy has hit the country's biggest automotive retailer. But the stock was 4.7% higher to $15.51 on the day after AutoNation's (AN, news, msgs) chief executive said the Federal Reserve's rate cuts should spur higher sales later this year.The dealership giant said it earned $51.7 million, or 28 cents per share, in the fourth quarter -- a 31% decline from the $75.2 million, or 36 cents per share, the company earned in the fourth quarter of 2006. Excluding one-time charges, AutoNation earned 27 cents per share, lower than the consensus estimate of 32 cents per share.
Revenue fell 4% to $4.2 billion, while new-vehicle sales fell 6.4% to $2.4 billion. Used-vehicle sales dropped nearly 2.8% to $973 million.
Sales will be pressured, especially in California and Florida, CEO Mike Jackson said. Both states, which make up half of the company's new-vehicle sales, have been struggling with the housing-market downturn.
The company believes that the U.S. new-vehicle sales will decline to the mid-15 million unit level from 16.1 million units in 2007. In a conference call with analysts, Jackson said that the housing slump "continues to impact consumers' willingness and ability to make large-ticket purchases, especially autos."
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Most economists believe that it takes about six months for interest-rate cuts to really take effect in the economy.
Continued: Guitar Hero revs up Activision
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