July 27th, 2011 9:20 AM by Mel Samick
Last week's companies' quarterly earnings, Greece's bailout package and raising the domestic debt ceiling were on investors' radars. Better-than-expected earnings for most reporting companies and a European Union agreement on the Greek bailout package gave optimism to investors; however these same investors are still waiting for a solution regarding the domestic debt ceiling. Based on last week's positive market performance, it seems unlikely that the U.S. would default on its debt. Ruin the economy or not?...hopefully, Congress will decide this week.
Riding on the better-than-expected quarterly earnings, all major indices ended up around 2 percent for the week. The S&P closed at 1,345 while the Dow ended the trading week at 12,681. Last week, the Leading Indicators Index jumped up in June as well as for the month of July, the Philadelphia Fed survey posted a soft growth in the mid-Atlantic manufacturing sector. In the earnings sector, major companies like Apple, IBM, AT&T and Coca-Cola beat expected earnings per share. Apple blew out all estimates and recorded its best quarter yet with their stock price jumping up by 7 percent. However, Goldman Sachs missed its estimates but share prices still rose by 4.2% for the week. Though companies posted profits, the unemployment rate is 9.2 percent, suggesting that companies are focusing more on international markets. Commodity prices were also up last week with crude prices jumping up by 2.5 percent.
The Ten-year treasury yield was up 8 basis points and ended the week at 2.98 percent. Towing the same line, mortgage rates was also up a little last week. At the end of week, the Conforming Fixed 30-year rate leveled out at around 4.39 percent while the Conforming Fixed 15-year rate finished at around 3.66 percent. Standard 5/1 ARM rates were last seen hovering around 2.81 percent. The housing market got some new life with the housing market index rising in the month of July after the depressed month of June. Also, for the month of June, the sector witnessed a massive 14.6 percent jump in housing construction and a 2.5 percent jump in housing permits.
Information provided by NYCB Capital Makets