Stock Market News for October 26, 2009

US stocks ended a volatile week on a down note as investors reshuffled their holdings amid concerns about the market’s current levels.  After some railroads provided cautious forecasts, traders chose to take money off the table, sending stocks lower even as Microsoft and Amazon.com reported better-than-expected profit reports.  A rising dollar sent commodities lower, hurting shares in materials and energy companies.

The Dow Jones industrial average fell 109 points, or 1.1%, to 9,972.18, for a modest loss on the week.  The S&P 500 index fell 13.31, or 1.2%, to 1,079.60 and the tech-heavy Nasdaq fell 10.82, or 0.5%, to 2,154.47.  For the week, the DJIA retreated 24 points, or 0.2% and the S&P 500 index fell 0.7%. 

Stocks had jumped Thursday after companies from 3M (NYSE:MMM - Analyst Report) to AT&T (NYSE:T - Analyst Report) reported better-than-expected profit reports. 

Weak demand assumptions sent crude prices lower, off 69 cents, or 0.9%, to close at $80.50, hurting energy shares 2.2% Friday.  Hurt by the dollar’s rise basic materials fell 2.3%, and industrials retreated 1.6%.  Ahead of the US Treasury plans to auction a greater-than-anticipated, record $212 billion in government debt this week, treasury prices slumped, sending corresponding yield higher, with the yield on the 10-year surging to 3.48% from 3.42% late Thursday.

On the week nine of the ten S&P500 sectors closed lower, with technology stocks being the only exception, adding 0.9%.  A resurrection of Obama's health care initiative hurt shares of the sector, off 1.8% on the week.  Industrials retreated 1.5%; oil and gas as well as basic materials lost 1.3%; utilities dropped 1.2%. Consumer goods and consumer services eased 1.0%, with financials down 0.9% and telecommunications off 0.5%.

For the week, the relative strength in the NASDAQ was helped by estimate-beating numbers from its components.  On Friday, Amazon.com (NASDAQ:AMZN - Analyst Report) reported better-than-expected numbers on the strength of Kindle sales.  Microsoft (NASDAQ:MSFT - Snapshot Report), which launched the Windows 7 operating system, also reported higher-than-anticipated first quarter numbers.  However, several chip firms hurt the group’s prospects.  MEMC Electronic Materials (NYSE:WFR - Analyst Report) reported a greater-than-expected loss and Broadcom (NASDAQ:BRCM - Analyst Report) warned of little sequential growth likely in its fourth-quarter sales.

The advance third quarter GDP data to be released Thursday could prove to be decisive as equities balance traders' interest in booking profits against an ongoing appetite for risk.  Last week's global data showed China’s economy growing an impressive 8.9% during the first nine months of the year, while recession continued in the UK and its economy contracted 0.4%.  At home, though, the recession is expected to have retreated back, with expectations of a 3.2% growth demonstrating the most significant pace in two years.