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This Week's Market Review

Oil prices and turmoil in the Middle East took the forefront as the market ended the week with steep losses. In what should have been a week that got earnings season off to a start, $78 per barrel oil, war worries, and lowered expectations for the second half trumped the few earnings reports that came out. We saw positive reports from the likes of Alcoa, Pepsi Bottling, Genentech, and Marriott, while General Electric reported in line with forecasts. These reports did little to boost market sentiment. There was little help from the few economic releases during the week. The May trade balance came in a bit lower than expected, initial claims for unemployment were up slightly, while retail sales dipped a bit. While most economists are still predicting a 2% to 3% real GDP growth in the second half of the year, there are fears of weaker growth at a time when oil prices continue to rise, slowing consumer spending, and the possibility that the Fed may raise rates further. As earnings season kicks off in earnest this week, the market is learning to adjust to slower earnings growth from the once predicted 12% growth over the second half of the year. Because of this, the market is likely to remain volatile in the weeks ahead.

The DOW closed the week down, falling 351.32 points to close at 10739.35 The S&P fell 2.3%, dropping 29.28 points, ending the week at 1236.20. The NASDAQ declined 4.4%, shedding 92.71 points, ending the week at 2037.35.