U.S. Stocks Little Changed in Week After Bush Pledge (Update1)
By Eric Martin
Sept. 1 (Bloomberg) – U.S. stocks were little changed last week, capping the first monthly advance since May, as promises by President George W. Bush to help home owners offset concern mortgage defaults were starting to stymie consumer spending.
The Standard & Poor''s 500 Index rose more than one percent yesterday, erasing all but 0.36 percent of the index loss for the week. Stocks declined earlier in the week after reports showing consumer confidence decreased the most since 2005 last month and home values had the steepest tumble in at least five years in June.
Fannie Mae, the largest source of money for U.S. home loans, and Goldman Sachs Group Inc., the biggest securities firm, rebounded on Aug. 31 after Bush and Federal Reserve Chairman Ben S. Bernanke pledged to prevent credit losses from snuffing out economic growth.
``People are trying to really evaluate what is going to be the extent of the overall problem with mortgages,'''' said Edward Hemmelgarn, who oversees about $350 million as president of Shaker Investments Inc. in Cleveland. ``When people raise those questions, they have a great deal of trouble coming up with good answers.''''
For the week, the Standard & Poor''s 500 Index fell 0.4 percent to 1473.99. The Dow Jones Industrial Average dropped 0.2 percent to 13,357.74. The Nasdaq Composite Index gained 0.8 percent to 2596.36.
Bush said the government will help people with delinquent mortgages keep their homes. Bernanke''s promise to ``act as needed'''' to limit the impact of loan defaults helped send consumer-related shares to the highest level in three weeks.
``Lightning struck twice in the same place, with Bush supporting housing and Bernanke suggesting the Fed is ready to accommodate if it''s required,'''' said Hank Herrmann, who oversees $55 billion as chief investment officer at Waddell & Reed Asset Management Co. in Overland Park, Kansas. ``Those were both soothing to a market that''s really been on edge.''''
Stocks in Europe and Asia rose for the second week on speculation company earnings and global economic growth will withstand a U.S. housing slump. The pan-European Dow Jones Stoxx 600 Index rose 1.5 percent to 375.94 this past week, giving it a 1.1 percent loss for the month.
The Morgan Stanley Capital International Asia-Pacific Index added 2.6 percent to 152.16, as all 10 industry groups advanced. The measure jumped 8.1 percent in the previous five-day period, after a four-week, 15 percent rout. The S&P 500 rose 1.3 percent in August, after two months of declines.
In the U.S. technology companies gained after Seagate Technology, the world''s largest maker of hard-disk drives, boosted its sales and profit forecast and Dell Inc., the second- largest maker of personal computers, reported earnings that topped analysts'' estimates.
Citigroup Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. led financial companies lower after Merrill Lynch & Co. analysts reduced their rating on the shares to ``neutral'''' from ``buy.'''' Forecasts for 2008 ``appear increasingly unrealistic,'''' New York-based analysts Guy Moszkowski and Patrick Davitt wrote in a report. ``Slower debt, mergers and acquisitions and equity underwriting businesses seem inevitable.''''
S&P/Case-Shiller said home values had the steepest tumble in at least five years in June and the National Association of Realtors said sales of previously owned homes fell 0.2 percent to an annual rate of 5.75 million. While the home sales retreat was less than forecast, inventories of single-family homes rose to the equivalent of 9.2 months'' supply and sales dropped 9 percent.
A measure of homebuilders in the S&P 500 fell 5.3 percent, with 13 of 16 members declining. Centex Corp., the fourth-largest U.S. homebuilder, fell 9.6 percent to $28.91.
The Conference Board on Aug. 28 said consumer confidence in August fell the most since after Hurricane Katrina two years ago. The New York-based Conference Board''s index declined to 105 from 111.9 in July. Economists surveyed by Bloomberg News forecast the index would slip to 104 from an originally reported July reading of 112.6.
Progressive Corp. fell 11 percent to $20.34, the steepest drop among insurance companies in the S&P 500. The auto insurer that apologized for spying on policyholders in a Georgia church will be investigated by the state''s insurance commissioner over its use of private detectives.
Shares of technology companies gained the most out of 10 industry groups in the S&P 500, boosted by Dell Inc. and Seagate Technology.
Dell gained 1.8 percent to $28.25. Results were buoyed by efforts to woo retail customers and a drop in component costs.
Seagate climbed 3.5 percent to $25.82. Demand for laptop disk drives and higher-capacity desktop-computer storage is fueling sales at Seagate, said Aaron C. Rakers, an analyst at AG Edwards & Sons Inc. in St. Louis. That''s allowed the company to raise prices.
Tiffany & Co., the world''s second-largest luxury-jewelry retailer, climbed 14 percent to $51.33, the biggest gain in the S&P 500, and led consumer discretionary companies to a 0.6 percent gain. The company raised its annual profit and revenue forecasts after second-quarter earnings exceeded analysts'' estimates and sales rose the most in seven years.
Energy companies advanced 0.6 percent after crude oil rose to its highest since Aug. 3 on concern a storm in the Atlantic Ocean may intensify and threaten rigs and pipelines in the Gulf of Mexico. Oil rose 4.2 percent for the week.
Investors next week will see reports that may show the economy expanded without fueling inflation. The Institute for Supply Management on Sept. 4 may say U.S. manufacturing expanded at a slower pace in August, according to the average estimate of economists surveyed by Bloomberg. The National Association of Realtors may report Americans signed fewer contracts to buy previously owned homes in July, according to the economists.
U.S. exchanges will be closed Sept. 3 for the Labor Day holiday.
To contact the reporter on this story: Eric Martin in New York at Emartin21@bloomberg.net .
Last Updated: September 1, 2007 13:40 EDT
menurut Citi Research yg dikirim om nikonian
DOW bisa jatuh sampai 11000 ?????
hati2 dalam periode tanggal 19 sept s/d 11 oktober
kalo bener2 kejadian Dow 11000………………
berapa IHSG ??????????
bisa… bisa…. banyak yg gantung diri tuh………..
FUTURE MARKET TODAY\r\n\r\nDOW +33.00 13376.00 9/6 1:24am \r\n\r\nNasdaq +2.75 2006.00 9/6 0:32am \r\n\r\nS&P500 +2.20 1478.80 9/6 1:28am \r\n\r\nDOW Future Ijo, Lho!! :-?\r\n\r\nIya wong semua index² itu ikut IHSG koq . Coba d, kalo besok IHSG merah, maka kemungkinan index² itu juga ikut merah.