This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Stocks Post First Weekly Slump in July

Stocks in this article: ^DJI^GSPC^IXICCLFTSLASBUXEXPE

NEW YORK ( TheStreet) -- U.S. stock markets posted their first weekly decline in July as investors balked at surpassing the 1,700 level on the S&P 500, unsure about the strength of the U.S. economic recovery and the Federal Reserve's commitment to maintain its stimulus program.

The S&P 500 turned positive in the final minutes of Friday's trading as it increased 0.08% to 1,691.65 but slipped 0.03% for the week. The Dow Jones Industrial Average added 0.02% to 15,559.20, and added 0.1% for the week. The Nasdaq finished up 0.22% at 3,613.16 and up 0.22% for the five-day trading period.

"For me, it has been and will continue to be all about the Fed and its willingness to continue $85 billion per month of MBS mortgage-backed security and Treasury purchases," said Michael Pento, president of Pento Portfolio Strategies based in Holmdel, N.J.. "If there is a tapering commenced in September, the equity market will react negatively and interest rates will spike towards 4% on the ten-year note."

Expedia ( EXPE ) posted the biggest percentage loss in the S&P, dropping 27% to $47.20 after the online travel service company missed second-quarter estimates by 15 cents at 64 cents a share, a result of poor performance at its Hotwire unit.

Starbucks ( SBUX ) was a clear winner, jumping 7.6% to $73.36 after the coffee chain posted fiscal third-quarter results that surpassed Wall Street expectations. Starbucks' Americas segment is "firing on all cylinder," Starbucks CEO Howard Schultz said on the conference call.

Cliffs Natural Resources ( CLF ) advanced 7.2% to $19.71 after the coal producer booked second-quarter earnings of 82 cents a share on revenue of $1.49 billion, surpassing the average analyst earnings estimate of 61 cents a share on revenue of $1.41 billion.

Tesla Motors ( TSLA ) popped 4.3% to $129.39 after one of the stock's biggest bears upgraded the stock, saying the stock could more than double in the next three or four years.

Next week, the Federal Reserve begins a two-day policy meeting as investors await the widely-watched U.S. government non-farm payrolls report for July, scheduled to be published on Friday. The government will also released its advance estimate of second-quarter U.S. gross domestic product on Wednesday.

Pento added that there's a potential for downside risks no matter the outcome of key U.S. data next week and therefore advises investors to sell into the resumption of a rally.

"A negative surprise on the job report to the downside would keep the Fed on hold but will send shares lower because investors need rising GDP and revenue growth to justify current stock prices," said Pento. "However, a reading much above 200,000 may boost the equity market in the short term but would lock in a tapering in September. Therefore, I would fade any rally."

Economists on average are expecting nonfarm payrolls to reach 184,000 for July and the jobless rate to come in at 7.5%, according to a Thomson Reuters poll of economists. Pento is predicting the job report to show a decline to 185,000 with the unemployment rate at 7.6%.

According to Thomson Reuters, the blended estimate for the second quarter, which reflects reported results and analyst expectations, is for year-over-year earnings growth of 3.9% from the S&P 500, down from 5.4% in the first quarter. So far 39% of S&P 500 companies have reported their earnings results.

The benchmark 10-year Treasury was rising 3/32, diluting the yield to 2.565%.

Written by Andrea Tse and Joe Deaux in New York

>To contact the writer of this article, click here: Andrea Tse.>

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs