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.
[table id=26 /]

Stocks experienced another volatile ride on Monday before finishing with a modest gain, as investors tried to rally the market from a 4-week, 15% slide. On Tuesday, the Dow soared over 300 points despite a lack of positive economic news. While seemingly paradoxical, the possibility that poor economic news will lead to the easing of monetary policy by the Fed sometimes leads to a “bad news equals good news” investing mentality. Stocks continued up strongly on Wednesday, as gold fell abruptly from its recent high to below the $1800 an ounce mark. The market gave back some of its weekly gains on Thursday with a sizeable loss despite Warren Buffett’s decision to invest $5 billion in Bank of America, as investors are having doubts that Fed Chair Bernanke will enact quantitative easing in the near future. Another wild ride on Friday eventually led to big gains on Friday as Bernanke gave encouraging words for the economy while not announcing any additional stimulus plans.

Stocks broke a horrendous 4-week slide with a strong bounce back this week.
[table id=25 /]

An uptick in merger activity on Monday propelled stocks upward, as the Dow gained back all the losses from the S&P US debt downgrade on August 5. Stocks slid about a percent on Tuesday on disappointment over how European officials plan to solve their debt woes. On Wednesday, the markets were largely unchanged despite several companies such as Target and Staples posting positive earnings reports. Fear returned once again on Thursday, causing a 400+ drop in the Dow following a host of negative US economic reports. Gold hit an all-time high at more than $1800 an ounce. On Friday, stocks made early gains in the morning before dropping another 1.6%, as the threat over a double-dip recession seems to be growing.

Stocks had another difficult week, with small cap stocks once again being battered more than large-cap stocks.

[table id=24 /]

On Monday, stocks reacted most unfavorably to the S&P decision to downgrade US debt to AA+ from AAA+ the previous Friday, as the S&P 500 index dropped almost 7%, and the Dow dropped below 11000. Investor panic caused volatility to spike to its highest level since the “Flash Crash” of May 6, 2010. While the volatility remained on Tuesday, stocks eventually soared on a roller coaster day that saw the Dow swing 600 points throughout the day. A Fed statement that interest rates would remain low through mid-2013 initially sank stocks, but the major indexes recovered with a bang in the final hour of trading. These gains, however, were wiped out and more on Wednesday with a 520 point loss for the Dow over concerns regarding French banks and European debt. It was the third consecutive day that the Dow experienced at least a 400 point move. On Thursday, stocks screamed up once again, as the Dow set a record for most consecutive 400+ point swings. Stocks settled some on Friday, as volatility and large intraday swings subsided on a lower volume day with the Dow gaining 125 points.

Despite the fall-out from the S&P debt downgrade and the extreme volatility, the markets lost a relatively small amount this week, with large-cap stocks faring better than small-cap stocks.

[table id=23 /]

Stocks finished modestly down on Monday despite cautious optimism that Congress would pass a debt ceiling resolution before the Tuesday default deadline. Also contributing to the decline was a US manufacturing report indicating that manufacturing slowed to its lowest rate in two years. With the debt ceiling issue temporarily dealt with, investors began to focus on the growing suspicion that the US economy is faltering once again. The Dow fell for the eighth consecutive session with a 265 point loss and the S&P 500 turned negative for the year on Tuesday. The major indexes finally broke their losing streak on Wednesday with a late day rally. On Thursday the S&P 500 experienced its worst one-day drop since February 2009 as investors fled in fear to the sidelines. The S&P 500 has lost nearly 11% in the last 10 trading days. On Friday, a better than expected jobs report sparked an early morning rally that quickly faded by noon, sending stocks deep into the red. However, after a roller coaster afternoon, the market finished near the unchanged mark for the day.

This was the worst week for stocks in more than two years when the country was in the midst of the Great Recession. Small cap stocks fared far worse than their large cap counterparts.
[table id=22 /]

Monday kicked off the week with jitters over the lack of agreement between Democrats and Republicans on how to deal with the August 2 deadline to raise the debt ceiling to avoid an unprecedented default on the part of the US. Still, losses were curtailed to less than a percent despite the doubt. Stocks dropped again on Tuesday as the debt debate war raged on, although low volume is indicating that investors are unsure of how to react to the situation. Selling accelerated on Wednesday as investor sentiment is that a debt rating downgrade from AAA by S&P or Moody’s may be a foregone conclusion. On Thursday much of the same concern led stocks down again for a moderate loss despite being well into the black earlier in the trading session. On Friday the Dow made it 0 for 5 for the week and six straight losing sessions following news that the initial estimate for the second quarter GDP reading came in at a disappointing 1.3%.

While all the indexes were down significantly this week, it is a bit surprising the damage was not worse given the grave circumstances concerning the nation’s debt deadline.

[table id=21 /]