Stocks gained back a healthy chunk of last week’s losses on Monday as hope over a European bailout plan gained some momentum. On Tuesday stocks gained another percent as European debt once again made top billing on the market front. While stocks rose once again on Wednesday morning, falling commodity prices eventually led to a loss on the day, breaking a three-day winning streak. It was another volatile day on Thursday with wide point swings, with the market eventually finishing up, buoyed by a better-than-expected dip in new unemployment claims.  On Friday, the third quarter ended with a whimper, falling over 2% to finish the worst quarter since the first quarter of 2009, at the depths of the Great Recession.  [table id=30 /]

The five day winning streak of last week quickly ended on Monday with the Dow losing over 100 points as the repetitive Greek debt woes theme resurfaced once again. On Tuesday, a large early morning gain was all but wiped out by the end of the day. The Fed’s “Operation Twist”, a measure to lower long-term borrowing costs by buying long-term treasuries to replace its holdings of short-term treasuries, severely spooked the market on Wednesday, as the Dow dropped nearly 300 points. The rush for the exits continued on Thursday with a nearly 400 point Dow drop as investors fear that the fragile economic recovery is dying. On Friday the Dow ended with a small gain, although it finished the week with the largest loss since 2008.

There was a lot of pain all around this week, with small-cap stocks faring worse than large cap stocks. [table id=29 /]

Stocks statred off the week on Monday with another sizeable loss through much of the day, but an afternoon report that China is considering buying Italian government debt to stabilize the beleagureed southern European country sent stocks to a moderate gain for the day. The tech sector led the way on Tuesday as stocks logged back-to-back gains. On Wednesday the Dow gained another 140 points after news that talks by European leaders to disucss Greece’s debt might lead to a solution to its debt problem. Stocks extended their winning streak to four days on Thursday with a large gain as further relief over at least the short-term stability of European debt gained traction. On Friday stocks made it a perfect five-for-five for the week as the momentum from previous days carried over to the end of the week. [table id=28 /]

The market opened the holiday-shortened week down sharply following a sell-off in the European markets the previous day. Still, stocks recovered some of that loss later in the day in response to a positive US nonmanufacturing activity report. On Wednesday stocks rebounded strongly following a German legal ruling that bailouts of struggling EU members is legal. The Italian senate also approved an austerity plan. However, on Thursday the markets gave back another 1% after the European Central Bank did not give a particularly glowing growth forecast for the near future. The slide escalated on Friday with the Dow losing over 300 points on a bevy of troubling news. Investors were not happy with the resignation of a key European Central Bank board member or with Preisdent Obama’s proposed job plan. [table id=27 /]

Hurricane Irene failed to keep Wall Street closed on Monday, and investors responded by sending stocks sharply higher on relief that the storm was not as destructive as predicted. On Tuesday the market recovered from a morning swoon to finish with a small gain after news that the Fed is considering quantitative easing to stimulate the economy. A very rocky August ended on Wednesday as the Dow edged into positive territory for the year. Still, the 4.4% monthly loss for the Dow was the worst for the month of August in a decade. On Thursday stocks ended a 4-day winning streak and closed down over 1% on concerns over Friday’s upcoming job report. Those fears were borne out on Friday as new job creation effectively ceased in August, raising the specter that a double dip recession is at hand. The Dow dropped over 250 points, an ominous start to the historically worst month of the year for the stock market.

Early gains in the week partially offset the slide on Thursday and Friday.
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