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The Today's News

US stocks break six-week winning streak

The broad-based S&P 500 shed 0.50 percent to 1,411.13, and Nasdaq ended off 0.22 percent at 3,069.79 . US stocks turned lower this week after six straight weekly gains as fresh signs of frailty in the global economy emerged and a number of companies cut their corporate profit forecasts.   A rebound Friday on signs that authorities in China, the United States and Europe might be more ready to take action to support their respective economies erased some of the earlier losses, keeping the indices near their multi-year highs.   But momentum was clearly sagging, with investors looking for something more solid to cling to before pushing stocks higher, according to analysts.   Most traders were on edge for more cues from both politics and economic data, with the Republican Party convention to anoint Mitt Romney their official presidential candidate set for next week, to be followed by a key policy speech by Federal Reserve chairman Ben Bernanke on August 31.   After Friday s bump, the Dow Jones Industrial Average ended down 0.88 percent for the week at 13,157.97.   The broad-based S&P 500 shed 0.50 percent to 1,411.13, and the Nasdaq ended off 0.22 percent at 3,069.79.   Share prices overall were frail even as tech stars Apple and Amazon set new record highs, with Apple becoming the most valuable company of all time at $623.52 billion by market capitalization on Monday.   Big losers included Hewlett-Packard (down 9.9 percent for the week), Dell (down 7.9 percent) and Intel (down 5.4 percent) on worries about the sagging PC market after both HP and Dell lowered earnings expectations.   Best Buy closed the week down 14.6 percent on its poor earnings and the failure of talks by founder and former chairman Richard Schulze to take over the electronics retail chain.   Facebook, battered by selling from early investors after a post-IPO lockdown period expired, managed to eke out a 1.9 percent gain, ending at $19.41, just above half of its $38 initial offering price in May.   Hints from the minutes of the Fed s FOMC policy board, and a letter to a congressman from Bernanke, that the central bank was closer to deciding on new stimulus helped underpin the market during the week, pulling interest rates lower.   But the same hints also underscored that the Fed predicted economic growth would be weaker than in the first half -- not a good sign.   "Global stock markets have improved the past two months on reduced risks in the credit markets due in part to expectations of central bank action. That makes sense," said Dick Green of Briefing.com.   "But to continue to ignore the worsening economic data from around the world is almost mind-boggling," he said.   The coming week s news will include new bits of data on personal incomes (on Thursday) and manufacturers  orders (Friday), not likely enough to have a deep impact on perceptions.   More eyes will be on Bernanke s annual speech on August 31 at a Fed symposium in Jackson Hole, Wyoming, which has been the venue for signals on Fed stimulus actions.   "A disappointment at Jackson Hole is likely to have a greater impact now the market has digested the FOMC minutes which portrayed a committee poised to ease monetary policy again," said Geoffrey Kendrick at Nomura.   Barry Knapp of Barclays warned that the Republican convention which kicks off Monday, formally launching Romney s election challenge to President Barack Obama, could auger a rise in volatility in the markets through the November 6 vote.   "While the race remains too close to call, we believe the direction of the polls will be a major determinant of stock prices this fall," Knapp said.   "A look at S&P 500 index volatility during the past three elections when the incumbent s chances were tenuous due to a weak, uneven recovery (1976, 1980 and 1992) shows volatility," he pointed out -- though emphasizing that did not necessarily mean a falling market.