Exuberance over last week’s very positive non-farm payroll report still lingered on Monday, leading stocks to a half-percent gain on Monday, as oil prices exceeded $100/barrel once again. On Tuesday news of Microsoft’s $8.5 billion buyout of Skype propelled the market to another solid gain. Monday’s and Tuesday’s gained were effectively erased on Wednesday as the Euro dropped on further concern over Greek and Portuguese debt. On Thursday the seesaw market action continued with another half-percent gain following a morning swoon in stock prices. Greece’s debt weighed on the market once again on Friday, outweighing a positive consumer sentiment report. The major indexes finished down over a percent.

Stocks finished the week largely unchanged despite rather large swings throughout the week.
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Monday kicked off the trading month of May with a whimper with stocks registering minor losses despite the previous night’s news of the death of Osama bin Laden. It was another day of modest price movement on Tuesday as the dollar hit an all-time low versus the Swiss franc. On Wednesday the market suffered a more significant loss on disappointing manufacturing and private-sector jobs reports. Wednesday’s close marked the first time since October 2008 that the stock market lost ground over the first three days of the month. The decline continued on Thursday with a surprising uptick in new claims for jobless benefits weighing down stocks. Friday marked the one year anniversary of the May 6, 2010 “flash crash” that shook the markets at the time. This year, however, stocks rose moderately following a nonfarm payroll report that showed an increase of 244,000 jobs in April. Conversely, April’s unemployment rate rose to 9.0% from 8.8% in March.

Friday’s gain was not enough to erase the week’s losses, with small-cap stocks suffering much more than large-cap stocks.

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On Monday the major indexes were mixed with minor deviations from last week’s closing values, as investors have some concern over the rise in costs companies are experiencing. The S&P 500 hit a nearly 3-year high on Tuesday on positive earnings reports from 3M, Ford Motor, Caterpillar, and Cummins. Wednesday was a landmark day for several of the major indexes. The small-cap Russell 2000 became the first major index to recover all of its losses from the 2008-2009 stock decline to close the day at an all-time high. The NASDAQ closed at its highest mark since 2000, and the S&P 500 closed at a mark more than twice its low mark in March 2009. Continued positive earnings reports coupled with the Federal Reserve’s plan to not raise interest rates in the near future propelled stocks up once again on Thursday. The trading month ended on Friday with another gain for stocks, as optimism in the recovering US economy continues to swell. The small-cap Russell 2000 is now 152% above its low set in 2009.

Once again, it was a good week for stocks.

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Monday kicked off the week on a down note with a 140 point drop in the Dow as Standard and Poor’s cut its view of US debt from stable to negative. The market gained back about half of its losses on Tuesday on news that Dow heavyweight Johnson & Johnson issued a better-than-expected earnings report. On Wednesday, additional good earnings reports from companies such as Intel, Citigroup, and Apple sent stocks soaring into positive territory for the week, as investors seemed to have forgotten the recent downgrade in US debt. Stocks finished the week on Thursday with another gain at its highest close since June 2008 as more good earnings reports outweighed some mediocre business index and jobless claims news. The stock market was closed on Friday in observance of Good Friday.

It was a positive week all-around for the major indexes.

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The major indexes finished mixed on Monday prior to the kickoff of the first quarter 2011 earnings season. After hours, Alcoa beat expectations for earnings but disappointed on sales growth. On Tuesday both the market and crude oil fell sharply on concerns that raw materials are becoming too expensive to allow the recent economic growth to continue. On Wednesday tech stocks led the way on an otherwise largely unchanged market that failed to respond to President Obama’s plan to cut the US deficit by $4 trillion over the next 12 years. A negligible increase in stocks on Thursday resulted after an early-day slump was erased in the afternoon on news that the US House of Representatives approved the funding for the rest of fiscal year 2011. On Friday, stocks had their first good day of the week, as good news on consumer sentiment, inflation, and regional manufacturing more than offset disappointing earnings by Google.

The major indexes lost ground again this week as the market searches for direction.

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