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| Currency | US Dollar |
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| Canadian Dollar to US Dollar | 0.861846 |
Investors and traders have a long weekend to ponder which stock market will reopen on Tuesday after the Presidents Day holiday.
A market that saw the Dow Jones industrials jump 370 points from Monday to Wednesday, a sign to some that the worst of the 2008 sell-off was done?
Or the market that dropped the Dow 205 points on Thursday and Friday because of worries that the economy was sinking and unlikely to show much growth until the latter half of the year?
Friday's market was mediocre as a flood of bad news, ranging from recession warnings from Alan Greenspan to an earnings warning from electronics retailer Best Buy (BBY, news, msgs), weighed on investors' minds.
The Dow closed down nearly 29 points, or 0.2%, to 12,348. The Nasdaq Composite Index was off 11 points, or 0.5%, to 2,322, and the Standard & Poor's 500 Index finished up 1 point to 1,350.
The market faces a lot of news next week that will move markets, including:
- Just how willing is the consumer to part with his money? Best Buy's report Friday signaled continued consumer wariness. A clearer picture will emerge Tuesday when Wal-Mart Stores (WMT, news, msgs) and Whole Foods Market (WFMI, news, msgs) report fourth-quarter and first-quarter earnings, respectively. While Wal-Mart shares fell 1% to $49.44 today, they've risen 17% since bottoming in September. Whole Foods is off 28% from October, as it has struggled to find growth again. The stock fell 4.1% on Friday to $39.12.
- Are consumers about to get hit by higher gasoline prices? Energy prices went on a tear this week, with crude oil closing at $95.50 a barrel in New York, up 4% on the week. It could be that one cause for crude's jump is simply cold weather in the Midwest and Northeast. But a complicating factor is the dispute between Venezuela and ExxonMobil (XOM, news, msgs) over compensation for Exxon's assets in that country. After Exxon took Venezuela to court, the country stopped supplying products to the oil giant and may cut off sales to the United States. Exxon fell 0.2% to $85.37 on Friday.
- What's the real inflation picture? This question rises on Wednesday when the Labor Department issues its monthly Consumer Price Index report. It turns on what's a more accurate picture of inflation: the core Consumer Price Index that the Federal Reserve likes to cite because it shows a fairly benign picture or the top-line CPI, which has been galloping higher in the last year as food, energy and other prices have shot higher. The price of wheat has doubled in the last year, hitting $10.27 a bushel on Friday. The price of gold is over $900 an ounce, and platinum hit a record $2,063.70 an ounce on Friday, up $18.60 on the day.
- What's the real picture of corporate earnings? In addition to Wal-Mart and Whole Foods, earnings reports will come next week from Hewlett-Packard (HPQ, news, msgs), Crocs (CROX, news, msgs), Ruth's Chris Steakhouse (RUTH, news, msgs) and troubled French bank Société Générale (FR:GLE, news, msgs). There may be developments in the Microsoft (MSFT, news, msgs) offer for Yahoo (YHOO, news, msgs). (Microsoft is the publisher of MSN Money.) And there's talk airlines may start announcing merger deals next week. The Amex Airline Index ($XAL.X) was up 2% on Friday and is up 8.4% this month on takeover speculation. Based on results this week and expected, Thomson Financial estimates that S&P 500 company earnings will be off 21% for the fourth quarter. Most of that loss is due to heavy losses among financial companies. Technology and energy companies have seen the strongest profit growth rates -- 26% and 20%, respectively.
A quick look at Friday's results
Twelve of the 30 Dow stocks were higher Friday, along with 238 S&P 500 stocks and 31 stocks in the Nasdaq-100 ($NDX.X) index, which was down 7 points to 1,780.Financial stocks were the market leaders. JPMorgan Chase (JPM, news, msgs) led the Dow with a 1.5% gain to $43.25. Bear Stearns (BSC, news, msgs) was fifth among S&P 500 stocks with a 5.2% gain to $82.70 on persistent but not-confirmed reports it was a possible takeover target.
Technology stocks struggled. Apple (AAPL, news, msgs), which had rebounded up to $131 during the day on Tuesday, closed down 2.2% to $124.63 on Friday, 38% below its all-time closing high of $199.83 on Dec. 28.
For the week, the Dow and S&P 500 were up 1.4%. The Nasdaq added 0.7%. For the year, the Dow is still down 6.9%. The S&P 500 is off 8.1%, and the Nasdaq is down 12.5%.
| Close for week | Wk. ago close | % chg. | YTD. chg. | |
|---|---|---|---|---|
| Dow Jones industrials | 12,348.21 | 12,182.13 | 1.36% | -6.91% |
| S&P 500 | 1,349.99 | 1,331.29 | 1.40% | -8.06% |
| Nasdaq Composite | 2,321.80 | 2,304.85 | 0.74% | -12.46% |
| Russell 2000 | 701.52 | 698.90 | 0.37% | -8.42% |
| Crude oil per barrel | $97.91 | $91.77 | 4.06% | -0.50% |
| 10-yr. Treasury yield | 3.78% | 3.65% | 3.45% | -6.32% |
| Gold per troy ounce | $906.10 | $922.30 | -1.76% | 8.13% |
Worries about Friday's data
A consumer-sentiment report Friday showed that consumers are feeling increasingly jittery. The University of Michigan/Reuters survey fell to a reading of 69.6 in mid-February, down from a reading of 78.4 in January. Economists had been expecting a reading of 74 for February."There's a lot of negative headlines and market volatility, and those will continue to weigh on consumer sentiment," Barclays Capital senior economist Julia Coronado said to Bloomberg News.
Meanwhile, the Empire State manufacturing survey caused more concern for investors Friday, with a reading of negative 11.7 for February -- the first time the survey has been negative since May 2005. Readings below zero indicate contraction in the manufacturing industry.
Best Buy cuts forecast
Best Buy said Friday that it is lowering its fiscal 2008 forecast because of weak customer demand in January.Stock Chart (Year)
Best Buy
"Our post-holiday results are not going to be what we originally expected," interim Chief Financial Officer Jim Muehlbauer said in a statement, noting that the overall environment "grew more challenging."
Shares fell 2.5% to $44.62 on the day.
Best Buy's news follows a better-than-expected retail-sales report from the Commerce Department Wednesday. Sales rose 0.3% in January; economists had expected a 0.4% decline.
Greenspan: US on verge of recession
Former Fed chief Alan Greenspan won't go away.- Video: Free tax help from the IRS
Greenspan warned late Thursday that the U.S. is on the "edge" of a recession, with the likelihood that the country will fall into a recession now 50%. Greenspan, who spoke at the Cambridge Energy Research Associates conference in Houston, said that the U.S. is at "stall speed." He also said, however, that stagflation -- the term for when the economy slows while inflation rises -- was too strong a word for the state of the economy.
The former Fed chief said that American businesses were in good shape before this slowdown and that their health has helped prevent a recession from truly hitting the economy. Greenspan also cautioned, though, that the housing market is not going to turn around soon.
More from MSN Money
Deadline for bond insurers
The clock is ticking for troubled bond insurers MBIA (MBI, news, msgs) and Ambac Financial Group (ABK, news, msgs).New York Gov. Eliot Spitzer has given the companies three to five days to get their act together and raise capital, The Wall Street Journal reported. The companies need that capital to keep their AAA ratings and have been under pressure as the mortgage market has been slumping.
Spitzer suggested that state regulators might "strip the municipal businesses" from the bond insurers if they didn't find a solution soon, the Journal reported.
Video on MSN Money
The 'Warren Buffett rally': What happened?Stocks jumped this week on hopes that Warren Buffett would rescue troubled bond insurers. But after a look at the details, the market fell back. Buffett's lowball offer to reinsure muni bonds was a bet that desperate insurers will grow even more desperate, says MSN Money's Jim Jubak.
MBIA shares fell 3% to $12.24 Friday; Ambac dropped 2.9% to $10.22. (Financial Guaranty is privately held.)
Spitzer, Dinallo, representatives from the bond insurers and a number of other people involved in the industry testified Thursday before a House Financial Services panel on the state of the market.
Recent turmoil in the mortgage and credit markets has undermined the ratings of some of the bonds insured by companies like MBIA, Ambac and Financial Guaranty. That deterioration of credit quality has threatened the credit ratings of some of those insurance companies.
- Video: FGIC gets downgraded
If the companies lose their AAA ratings, some institutions wouldn't be permitted to hold their bonds. Subsequent sales could further disrupt markets.
Earlier this week, Warren Buffett said told CNBC that Berkshire Hathaway (BRK.A, news, msgs) had offered to help out Ambac, MBIA and Financial Guaranty by reinsuring $800 billion in municipal bonds.
Ambac and MBIA insure $1.2 trillion in bonds.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $95.50 | $95.46 | $0.04 | 4.09% | -0.50% |
| Heating oil (per gallon) | $2.6469 | $2.6666 | -$0.0197 | 4.43% | -0.09% |
| Natural gas (per million BTU) | $8.6600 | $8.7720 | -$0.1120 | 7.26% | 15.73% |
| Unleaded gasoline (per gallon) | $2.4754 | $2.4761 | -$0.0007 | 7.20% | -0.62% |
Not-so-tasty earnings for Chipotle
Shares of Chipotle Mexican Grill (CMG, news, msgs) slumped as much as 12% to $95.55 Friday after the restaurant chain late Thursday reported lower-than-expected fourth-quarter earnings. The stock, however, recovered to $105.25, a 3.1% loss.The company earned $17.5 million, or 53 cents per share, jumping from the $10.8 million, or 33 cents per share, Chipotle earned in the fourth quarter of 2006.
Stock Chart (Year)
Chipotle Mexican Grill
Revenue rose 32% to $288.9 million, in line with analysts' expectations.
The slowing economy is a growing worry for Chipotle. The company expects a tricky year in 2008 because rising food costs will squeeze profit margins.
The company forecast 2008 earnings growth of 25%, which means net income of at least $88.3 million, or $2.66 per share. Analysts expect Chipotle to earn $2.72 per share in 2008.
Priceline earnings fly high
With the economy slowing, travelers seem to be turning more to online travel company Priceline.com (PCLN, news, msgs) for deals.The company late Thursday reported fourth-quarter profits of $32.9 million, or 68 cents per share, up from $13.2 million, or 33 cents per share, in the same period a year ago.
Excluding one-time items, Priceline.com earned 96 cents per share, topping the consensus estimate of 84 cents per share. Revenue rose 29% to $334.9 million in the quarter.
Shares soared 21% to $123.86.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 2.130% | 2.220% | -0.090 | 13.90% | -32.17% |
| 5-year Treasury note yield | 2.764% | 2.770% | -0.006 | -2.19% | -20.00% |
| 10-year Treasury note yield | 3.780% | 3.818% | -0.038 | 3.87% | -6.32% |
| 30-year Treasury bond yield | 4.595% | 4.653% | -0.058 | 5.54% | 3.05% |
| Currencies | |||||
| U.S. Dollar Index | 76.155 | 76.240 | -0.085 | 1.16% | -0.70% |
| British pound in dollars | $1.9619 | $1.9697 | -0.0077 | -1.49% | -1.37% |
| Dollar in British pounds | £0.5097 | £0.5077 | 0.0020 | 1.51% | 1.39% |
| Euro in dollars | 1.4691 | 1.4643 | 0.0047 | -1.20% | 0.51% |
| Dollar in euros | € 0.6807 | € 0.6829 | -0.0022 | 1.22% | -0.51% |
| Dollar in yen | ¥107.75 | ¥107.82 | -0.07 | 1.26% | -3.67% |
| U.S. dollar in Canadian dollars | $0.993 | $0.999 | -$0.0071 | -0.62% | 0.05% |
| Canadian dollar in U.S. dollars | $1.007 | $1.000 | $0.0073 | 0.64% | -0.03% |
| Commodities | |||||
| Gold | $906.10 | $910.80 | -$4.70 | -1.76% | 8.13% |
| Copper | $3.5390 | $3.5005 | $0.04 | -0.01% | 16.38% |
| Silver | $17.1180 | $17.3530 | -$0.24 | 0.05% | 14.73% |
| Crude oil (NYMEX) (per barrel) | $95.50 | $95.46 | $0.04 | 4.06% | -0.50% |
By Charley Blaine and Elizabeth Strott, MSN Money
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