Week In Review

The week that was:

During a holiday-shortened week, stocks were mostly down as investors awaited Black Friday results from the retail sector.  In other news, European sovereign debt worries have resurfaced in recent weeks.  An agreement on aid to Ireland of about $113 billion is expected to be finalized later this weekend.  Portugal and Spain appear to be ready to take their turn in the sovereign debt spotlight next.  Spain’s funding needs are far larger than those of Ireland or Greece, as it is the fourth-largest economy in the euro zone.  Over the next three years, Spain will need approximately EUR 350 billion to roll over existing debt and fund deficits.

Expert network firms, which help investors do deep research by connecting them with consultants, have found themselves in the middle of a massive insider-trading investigation.  Federal authorities are conducting a criminal probe to find out whether inside information was passed along by consultants who work for these expert networks.  Major investment firms like Janus, Wellington, Citadel, and SAC have received subpoenas in the case.

According to the Labor Department, the number of U.S. workers making an initial claim for unemployment benefits dropped last week to a seasonally adjusted 407,000, the lowest level since July 2008.  The decline was considerably bigger than what analysts had expected.  The number of unemployed works who were already receiving benefits fell to 4.18 million, the lowest rate in two years.

Stocks:

The S&P 500 fell 10.33 points this week, or 0.86%, to 1189.40.  The Nasdaq Composite rose 16.44 points, or 0.65%, to 2534.56.  The Dow Industrials fell 111.55 points, or 1%, to 11092.00. 

• Bank of America (BAC) might be on the hook for billions of dollars because of mortgage-documentation problems it took on when it acquired Countrywide Financial in 2008 according to testimony from a recent lawsuit.  BAC stock was down 8.25% on the week.

Bonds:

End of week bond yields:

3 Month yield = 0.14%, up 3 bps from last week.

6 Month yield = 0.19%, up 2 bps from last week.

2 Year yield = 0.52%, up 1 bps from last week.

30 Year yield = 4.21%, down 3 bps from last week.

What to look for next week:

9:00 AM          Wednesday     ISM Manufacturing Index

9:00 AM          Thursday         Pending Home Sales Index

7:30 AM          Friday              ISM Manufacturing Index