Stock Market News for July 12, 2010 - Market News

US stocks moved up modestly last Friday, culminating in the best week for the market in almost one year. Results were bolstered by cautious optimism about upcoming second quarter earnings despite concern about the global economy.  Certain analysts thereby imply that companies will be able to deliver growth in profits despite the lack of significant improvement on the economic front.  A lack of negative news flow from Europe, and details of stress tests at European banks, also supported stocks last week.

In the four trading days last week, the DJIA moved up 5.3%, the S&P500 rose 5.4%, and the Nasdaq gained 5%.  The limited recovery came towards the end of the second quarter, which witnessed the Dow sliding 10% and the S&P500 falling 12%, partly due to concern of a slowdown in US growth.         

Google (GOOG) renewed its Internet Content Provider license to operate its site in China thereby ending a stand-off over censorship that lasted about 4 months.  The license renewal appeared to be an outcome of the company’s decision to not automatically channelize its users to its uncensored site in Hong Kong.      

On Friday, market breadth was positive while volume was thin.  On the New York Stock Exchange, advancing stocks were ahead of declining ones by almost four to one, on volume of about 880 million shares.  On the Nasdaq, advancing stocks beat losers by three to one, on volume of 1.61 billion shares.         

Alcoa AA was the Dow’s best performer last week gaining 9.4% ahead of its second quarter earnings report.  Certain stocks linked to the global growth cycle, such as Caterpillar CAT up 9% last week, also performed well.  Last Friday, the DJIA rose 0.6% to 10,198, the S&P500 was up 0.7% to 1,078, and the Nasdaq inched up 1% to 2,196.

In addition to Alcoa, companies reporting this week include JPMorgan Chase & Co. JPM, Bank of America Corp. BAC, and General Electric Co. GE. 

The weaker demand for government debt drove rates higher on Friday. Treasury prices retreated, pushing up the yield on 10-year paper to 3.06% from 3.02%.  Earlier in the year, investors purchased Treasury paper as the market faltered.  Despite economic forecasts that another recession was not considered likely, risk-averse investors sought a safe haven in US government securities.