Stock Market Report Week July 30 2011

Stock Market Report Week July 30 2011 : Stocks ended sharply lower for the week, with the S&P 500 posting its biggest weekly decline in a year, as Washington’s failure to reach a deal to raise the federal government’s debt limit and cut the deficit spurred credit rating downgrade fears, with prospects for a potential default increasing. In Addition to the debt woes, participants had to digest weak economic data, which signaled the economy is growing at a slower rate than expected.

For the week, the blue chip index tumbled 4.24%; the S&P 500 Index lost 3.92% and the NASDAQ fell 3.58%.

At the start of the week, stocks fell amid ongoing jitters regarding the lack of a deal in Washington for the U.S. government to raise its debt ceiling. Dueling plans from Democrats and Republicans in Congress and continuing bickering and posturing raised concern over a possible U.S. credit rating downgrade.

In Asia, equity markets fell as gold hit a record high as optimism for a deal on the debt ceiling in the U.S. began to fade, as talks between the President and congress collapsed, with Democrats and Republicans moving from one proposal to another, with only 1 week to go for the deadline of August 2nd. China was the clear underperformer, tumbling 3% and posting its biggest percentage decline in 6-months, as rail stocks weighed down the overall market following the deadly train cash of a bullet train.

The early selling pressure eased, as plans for a debt ceiling increase from the Republican and Democratic leadership in congress emerged and participants focused on earnings; however the strength found after the early morning weakness waned as politicians continued with their bickering about the dueling plans.

Most of the S&P 500 sectors fell, with only the utilities sector finishing in positive ground and healthcare, consumer staples, and financials posting the biggest declines. The healthcare sector lost more than 1% in the session, with Edwards Lifesciences (NYSE:EW), the maker of tissue replacement heart valves, heart valve repair products, and hemodynamic monitoring devices, tumbling 4.52% to $74.39 despite being upgraded to Outperform from Market Perform at Morgan Keegan, as the stock was still under pressure from its earnings miss last week.

On Tuesday, the market started near the flat line amid a flurry of earnings reports and mixed overseas performance, with the debt ceiling stalemate in Washington weighing on market sentiment around the world. A glimmer of good news in the housing market came as home prices held steady from the prior month in May, the first time in almost a year that prices have not fallen on a monthly basis; however on a yearly basis home prices were still down.

Still stocks closed lower amid some disappointing quarterly results and ongoing concern over the debt ceiling impasse in Washington.

In Asia, equity markets rebounded despite the Washington deadlock regarding the debt ceiling debate, as robust earnings from Canon (NYSE:CAJ) outweighed the strength of the yen and push Japanese stocks higher.

The early selling pressure eased, as plans for a debt ceiling increase from the Republican and Democratic leadership in congress emerged and participants focused on earnings; however the strength found after the early morning weakness waned as politicians continued with their bickering about the dueling plans.

Most of the S&P 500 sectors fell, with only the utilities sector finishing in positive ground and healthcare, consumer staples, and financials posting the biggest declines. The healthcare sector lost more than 1% in the session, with Edwards Lifesciences (NYSE:EW), the maker of tissue replacement heart valves, heart valve repair products, and hemodynamic monitoring devices, tumbling 4.52% to $74.39 despite being upgraded to Outperform from Market Perform at Morgan Keegan, as the stock was still under pressure from its earnings miss last week.

On Tuesday, the market started near the flat line amid a flurry of earnings reports and mixed overseas performance, with the debt ceiling stalemate in Washington weighing on market sentiment around the world. A glimmer of good news in the housing market came as home prices held steady from the prior month in May, the first time in almost a year that prices have not fallen on a monthly basis; however on a yearly basis home prices were still down.

Still stocks closed lower amid some disappointing quarterly results and ongoing concern over the debt ceiling impasse in Washington.

In Asia, equity markets rebounded despite the Washington deadlock regarding the debt ceiling debate, as robust earnings from Canon (NYSE:CAJ) outweighed the strength of the yen and push Japanese stocks higher.

In Europe, markets ended lower amid weak earnings reports from BP (NYSE:BP), STMicroelectronics (NYSE:STM), and UBS (NYSE:UBS) and on ongoing worries over the debt situation on both sides of the Atlantic, with fears over contagion in the euro zone climbing following increased yields in Spain and Italy after bond auctions.

Most of the S&P 500 sectors fell, with only technology posting gains, while industrials, materials, and healthcare posted the biggest declines.

Mid week, stocks tumbled, with the NASDAQ posting the biggest decline, on increased concern over economic growth amid mixed earnings reports, the uncertainty over the debt ceiling stalemate in Washington, and ongoing euro zone debt woes.

On the economic front, The Commerce Department said new orders for durable goods fell 2.1% in June, reversing the previous month's downwardly revised 1.9% increase. Economists had expected orders to gain 0.3%. And the Fed's Beige Book summary of economic conditions across the country said eight of the nation's 12 Fed districts reported moderating growth, suggesting the recovery is not gaining momentum as economists had anticipated.

Losses accelerated in the afternoon after the Beige Book was release and as participants’ unease increased on the lack of a deal in Washington. The S&P 500 closed below its key 50day moving average, which could spark additional downward momentum in the next sessions.

All of the S&P 500 sectors were declining, with Industrials, technology, financials, and materials underperforming the broad market sector, while utilities and consumer staples posted the smallest losses. The industrial sector was bogged down by concern over economic growth following the Fed’s report, second half guidance, and the unexpected drop in durable goods orders.

On Thursday, the market started in positive ground despite mostly lower performance in overseas markets on escalating fears over the lack of a deal in the U.S. to raise the debt ceiling as the August 2nd deadline looms. Futures had been chopping around the neutral line amid earnings reports from DuPont and Exxon Mobil, but moved to the upside after the Labor Department said that Weekly Jobless Claims unexpectedly dropped below the 400,000 mark, snapping a 15-week streak.

Stocks received another dose of better than expected economic news, after the June Pending Home Sales Index climbed 2.4% from May, much better than the expected 3% decline.

However the move higher lost steam over increasing skepticism that politicians in Washington will be able to reach a deal to raise the debt ceiling before the August 2nd deadline, as the House was schedule to vote on a bill later today, which had little chances in the Senate and that the President does not favor.

Most of the S&P 500 sectors closed lower, with only financials closing in positive territory, while consumer staples finished unchanged and industrials, utilities, and consumer discretionary posted the biggest declines.

At the end of the week, stocks closed lower after a late sell-off capped a dismal week for the equity markets, amid weak economic data and a stalemate in Washington that prevents the Congress to pass a bill that will cut the deficit, while increasing the borrowing authority of the U.S. government.

The market started under heavy pressure amid global markets seeing continued weakness, as Washington was not showing any signs of progress on a deal that could raise the borrowing authority of the U.S. government. GDP data showing the economy grew at a anemic 1.3% in the second quarter, while the first quarter also getting a negative revision, added downward pressure, giving more ammunition to the bears.

Despite several attempts to move into positive territory, with the NASDAQ turning mildly positive, the downward pressure from concerns over the anemic economic growth, coupled with the uncertainty of the debt ceiling impasse reignited recessionary fears and talk about a second dip.

All of the S&P 500 sectors finished lower, with materials, utilities, and energy posting the biggest declines, while financials and the consumer discretionary posted the smallest declines.