Stock Market News for February 8, 2010

Amid growing worries about Europe’s ability to control its public finances and an anemic labor market, stocks posted their fourth straight weekly decline even as the U.S. unemployment rate showed a surprise drop in January.

Although stocks managed to stage a late comeback on Friday, after a sharp drop in the afternoon, investors continued their flight from stocks.  Safe-havens such as the dollar and government debt were in demand.  As fears of sovereign debt contagion spread, the dollar jumped to a six-month high versus the euro and sent commodities prices lower.  A stronger greenback also hurt shares of companies that benefit from its weak status and also weighed on oil and gold prices. 

Nonetheless, Goldman Sachs (NYSE:GS - Analyst Report) sounded a note of optimism, noting, "With regard to sovereign contagion, while much will depend on the response of Greece and the eurozone, we believe the rest of southern Europe and Ireland are considerably less vulnerable than Greece, given their lower government financing requirements."

After plunging as much as 167 points during the session, the blue-chip Dow average recovered to close up 10 points, or 0.1%, at 10,012.23.  The broader S&P 500 index added a paltry 3 points, or 0.3%, to close at 1,066.19 and the tech-heavy Nasdaq, helped by strength in technology shares, rose 15.69 points, or 0.7%, to 2,141.12.  On the New York Stock Exchange, declining shares outpaced those that advanced in price by a nine-to-seven margin on volume of around 1.56 billion shares.  For the week, the Dow average lost 0.5% and the Nasdaq declined 0.3%.  The S&P 500 lost 0.7% for the week.  The DJIA is now down 713 points from its 15-month high reached on January 19.

Strength in the dollar sent crude prices down to $71.19 on Friday.  Nevertheless, amid all the turbulence, basic material shares managed a 1.7% gain, for a 1% rise on the week.  Financials (+1.1%) and tech (+1.1%) shares also showed strength late in the week and trimmed year-to-date declines to 3.3% and 7.7%, respectively.

On the other hand, companies' latest earnings announcements came in better than expected, with 74% of the firms reporting their numbers bettering analysts' earnings estimates, and 71% beating revenue projections.  Over the past week, Cisco (NASDAQ:CSCO - Analyst Report), Comcast (NASDAQ:CMSA), Dow Chemical (NYSE:DOW - Analyst Report), ExxonMobil (NYSE:XOM - Analyst Report), MetLife (NYSE:MET - Analyst Report), Time Warner (NYSE:TWX - Analyst Report), UPS (NYSE:UPS - Analyst Report), and Visa (NYSE:V - Analyst Report) reported earnings that were better than analysts’ projections; Aetna (NYSE:AET - Analyst Report) and Pfizer (NYSE:PFE - Analyst Report), however, offered negative disclosures.

Also, Treasury Secretary Geithner spoke optimistically over the weekend on the continuation of US' triple-A credit rating on its government securities as well as the "encouraging signs of healing" from recent GDP results and employment data. 

This week's key earnings reports are due from such significant, consumer-related firms as Disney (NYSE:DIS - Analyst Report), Coca-Cola (NYSE:KO - Analyst Report), Sprint (NYSE:S - Analyst Report), and PepsiCo (NYSE:PEP - Analyst Report).

Read the full analyst report on GS

Read the full analyst report on CSCO

Read the full analyst report on CMCSA

Read the full analyst report on DOW

Read the full analyst report on XOM

Read the full analyst report on MET

Read the full analyst report on TWX

Read the full analyst report on UPS

Read the full analyst report on V

Read the full analyst report on AET

Read the full analyst report on PFE

Read the full analyst report on DIS

Read the full analyst report on KO