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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On Monday the Dow closed at its highest mark since June 2008, although the NYSE composite volume was the lowest of the calendar year. On Tuesday, the major indexes finished effectively unchanged on light volume once again, with no new material revealed in the minutes of the most recent Fed meeting. The Dow hit another recent high on Wednesday, as news that several European banks were raising capital propelled the market to another winning day. While a better-than-expected initial jobless claims report initially helped markets on Thursday, a new 7.1 magnitude earthquake in Japan sent the Dow plunging 100 points, although the lack of any significant additional damage allowed the markets to crawl back to near the unchanged mark. On Friday, the imminent midnight shutdown of the federal government spooked investors, although losses on the day were relatively modest.

Most of the major indexes lost ground this week, although the losses were relatively minor.

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On Monday, further signs of a gradually improving economy emerged with positive consumer spending, personal income, and pending sales of existing homes reports, but the morning gains evaporated to a slight loss as the day progressed. Stocks bounced back on Tuesday with a moderate gain, closing at their highest levels since violence broke out in Libya on February 18. On Wednesday another moderate gain pulled the Dow to within just 40 points of its 2011 high, as Mideast/North Africa concerns seem to be failing to dampen the optimism in the stock market. The market took a small step back on Thursday, but ended the first quarter of 2011 with its best performance for a first quarter since 1999, remarkable give the Japan tsunami/nuclear reactor and political tension issues in March. On Friday, stocks marched ahead again as the Dow set a 2011 high while touching a nearly 3-year high intraday. The charge resulted from a downtick in unemployment to 8.8% and a better-than-expected nonfarm payrolls report.

It was a good week for stocks, but the big story was the conclusion of a very successful first quarter on Thursday.

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On Monday, the Dow broke and closed above the 12000 mark once again, as the market has seemingly put Japan and Middle East woes behind it. A slightly down day on Tuesday broke a three day winning streak, but the lack of volume and selling conviction was viewed as a good sign by some. On Wednesday, a disappointing record-low February new-home sales report failed to quench buyer enthusiasm, as the market shook off the report and finished with a moderate gain. On Thursday, stocks logged their fifth winning session out of the last six, with another moderate gain on good earnings, upgrades, and a positive statement by Dell. The market finished off the week on Friday up modestly after a revision of the fourth quarter 2010 GDP up to an annual rate of 3.1%.

It was a great week all-around for stocks.

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