Stock Market News for August 23, 2010

Stocks fell for a second consecutive week as persistent worries about the economy continued to weigh on investor sentiments. Concerned that the economy would slide back into recession, investors chose to stay away from stocks and flew to the safety of government debt. The Dow industrials and the Standard & Poor’s 500-stock index dropped on Friday but the Nasdaq managed to pull off a tepid advance.

Absence of catalysts further eroded volume on Friday, which already has fallen to a record low this month. The Dow average fell 57 points, or nearly 0.6%, to close at 10213. The S&P 500 index dropped 0.4% to 1072. The Dow average has re-entered the negative territory for the year. On the New York Stock Exchange, about three stocks rose in price for every two that advanced.

Last week, investor sentiment remained mired in weak economic data and activity on the deal-making front did little to shore up the shaky confidence. The week debuted with BHP Billiton’s (NYSE:BHP) hostile $38.6 billion bid for Potash (NYSE:POT). Intel (NASDAQ:INTC) announced its move into the security software space with a $7.7 billion offer for McAfee (NYSE:MFE). Rank Group also announced a deal to buy Pactiv (NYSE:PTV) in a $4.6 billion offer.

The Sunday Times reported Campbell Soup (NYSE:CPB) is planning a $2.3 billion break-up bid for United Biscuits.  The paper also said SABMiller is considering a $10.9 billion bid for the beer operations of Australian brewer Foster Group.

This morning, Hewlett-Packard (NYSE:HPQ) announced that it will pay $24 per share for 3PAR (NYSE:PAR), beating a rival $18 per share offer from Dell (NASDAQ:DELL). Hewlett-Packard’s offer now values 3PAR at $1.6 billion.

Last week the DJIA fell 90 points, or 0.9%, to 10,214, for a 2.1% year-to-date drop. The S&P500 dropped 0.7%, for a 3.9% decline on the year to 1072. The NASDAQ, however, managed a 0.3% increase on the week to finish at 2180; however, the index has fallen 3.9% so far this year. Economically-sensitive crude prices dropped 2.1% on the week to end at $73.82.

The yield on 10- year US Treasuries dropped for the fourth straight week, falling to 2.616% from 2.679%. This week sees auction of $109 billion notes and inflation-indexed securities. Meanwhile, a report from the mutual fund industry trade group Investment Company Institute says investors are cutting back on their riskier exposures as economic uncertainties linger. The report says investors withdrew $33.12 billion from US stock market mutual funds in the first seven months of 2010.

The list of companies reporting results has dried to an insignificant trickle. Firms reporting include Medtronic (NYSE:MDT) and Big Lots (NYSE:BIG) on Tuesday, JDS Uniphase (NASDAQ:JDSU) on Wednesday, Novell (NASDAQ:NOVL), and Patterson (NASDAQ:PDCO) on Thursday, and Tiffany (NYSE:TIF) on Friday.

Read the full analyst report on BHP

Read the full analyst report on POT

Read the full analyst report on INTC

Read the full analyst report on MFE

Read the full analyst report on PTV

Read the full analyst report on CPB

Read the full analyst report on HPQ

Read the full analyst report on PAR

Read the full analyst report on DELL

Read the full analyst report on MDT

Read the full analyst report on BIG