Weekly Market Recap: Dow Jones Index Hits 3 Year Highs as Bernanke and Jobs Boost Markets

Following a week of full of earnings reports and economic data fueling the U.S. markets higher, we took a snapshot of everything you need to know from the past week.

Monday

Markets closed down on Wall Street: Dow -0.05%, S&P -0.25%, Nasdaq -0.16%, Oil -0.59%, Gold -0.21%.

On the commodities front, Oil (NYSE:USO) fell slightly to $98.97 a barrel. Precious metals also fell, with Gold (NYSE:GLD) falling to $1,731.70 an ounce while Silver (NYSE:SLV) fell 1.04% to settle at $33.44.

Hot Feature: The Decline and Fall of Print Media.

Markets were down because:

1) Greece. Stocks slipped today as investors awaited news from a European summit in Brussels where leaders are expected to approve a permanent rescue fund for the euro zone and put the finishing touches on a so-called “fiscal compact” for stricter budget discipline. But discussions devolved into a sparring match between Greece and other nations critical of Greece’s half-hearted efforts to get its deficit under control. The country has yet to effect a debt writedown deal with private creditors needed if Greece’s troika of lenders — the European Union, European Central Bank, and International Monetary Fund —  are to release its 130 billion-euro bailout now thought to be insufficient to buoy Greece’s flailing economy.

2) Spending. Consumer spending was completely flat in November, the Commerce Department reported this morning. Though spending rose 4.7 percent for the year, when adjusting for inflation, it fell 0.1 percent in the final month of 2011, breaking three months of gains and setting the tone for a slowdown in 2012.

3) Banks. Financial stocks were among the worst performers on Monday, with Bank of America (NYSE:BAC) the biggest decliner on the Dow, falling about 3 percent. Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) all declined between 1 percent and 2 percent.

BONUS: Is Freddie Betting Against Homeowners?

Tuesday

Markets closed mixed on Wall Street: Dow -0.16%, S&P -0.04%, Nasdaq +0.07%, Oil -0.35%, Gold +0.47%.

On the commodities front, Oil (NYSE:USO) fell slightly to $98.43 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) climbing to $1,742.60 an ounce while Silver (NYSE:SLV) fell 1.12% to settle at $33.15.

Hot Feature: IRS Delays Refunds.

Markets were mixed because:

1) Summit. European Union leaders agreed Monday to strengthen the region’s financial firewall while all but two of the group’s 27 member nations agreed to sign a new fiscal compact that would impose quasi-automatic sanctions on countries that breach budget deficit limits and enshrine balanced budget rules in national law. However, the first summit of the year ended without new solutions for the debt crisis in Greece. Athens has yet to reach a deal with private creditors on restructuring its debt, and without a deal, the government jeopardizes its access to bailout funds it needs to meet a 14.5 billion-euro bond payment due on March 20. If Greece is unable to make the payment, it will go into default. 

2) Reports. The S&P/Case-Shiller home price index today showed the value of U.S. homes to have dropped 1.3 percent in November from the previous month. The Conference Board’s Consumer Confidence Index was also released today, and showed consumer confidence to have declined slightly in January when economists had predicted improving sentiment. But while worse-than-expected economic data tempered the morning’s gains, it wasn’t enough to prevent markets from holding on to the best January of the 21st Century.

3) Earnings. RadioShack (NYSE:RSH) shares plunged after the electronics retailer warned Monday that its fourth-quarter earnings will fall short of expectations. Exxon Mobil (NYSE:XOM) reported a jump in quarterly earnings, but Edward Jones described the oil giant’s fourth-quarter results as “mediocre” and said the company’s “downstream unit” — that which deals in chemicals and engine lubricants — is down. Exxon shares tumbled today, while Mattel (NASDAQ:MAT) shares surged after the toymaker’s quarterly earnings beat Wall Street’s estimates and raised its annual dividend 35 percent. Pfizer (NYSE:PFE) also beat Wall Street’s expectations on earnings and revenue, but was hurt in the fourth quarter by the loss of its patent for cholesterol drug Lipitor, causing shares to slide lower.

BONUS: China’s WTO Violations Threaten 1.6 Million U.S. Jobs

Wednesday

Markets closed up on Wall Street: Dow +0.83%, S&P +0.89%, Nasdaq +1.22%, Oil -1.03%, Gold +0.34%.

On the commodities front, Oil (NYSE:USO) fell slightly to $97.47 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,746.30 an ounce while Silver (NYSE:SLV) rose 1.42% to settle at $33.74.

Hot Feature: Construction Spending in U.S. Rose in December

Markets were up because:

1) Manufacturing. The Institute for Supply Management’s manufacturing index rose to 54.1 in January, from 53.1 in December, signaling growth in the industry that accounts for roughly 12 percent of the U.S. economy. Manufacturing growth could help cushion the U.S. economy from a slowdown in Europe being caused by the region’s sovereign debt problems. Without any new fires in Europe, today’s manufacturing data, which has been backed up by recent regional reports by the Federal Reserve, helped markets rally after a relatively thin session on Tuesday.

2) Tech. The technology sector was supported today by strong quarterly results from Broadcom (NASDAQ:BRCM) and Seagate (NASDAQ:STX). Broadcom reported slightly better results while also issuing a brighter outlook for 2012, while Seagate shares surged after the data storage company reported strong quarterly sales and earnings. AOL (NYSE:AOL) also joined in the rally after reporting a 66 percent drop in fourth-quarter earnings that was still better than expected.

3) Financials. Financial stocks led today’s rally, supported by expectations that a highly anticipated IPO filing by Facebook could signal a rebound in capital markets activity. Shares of Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JPMorgan (NYSE:JPM) all rose between 2 and 4 percent.

BONUS: ADP: Private Sector Added 170K Jobs in January

Thursday

Markets closed mixed on Wall Street: Dow -0.09%, S&P +0.11%, Nasdaq +0.40%, Oil -1.07%, Gold +0.74%.

On the commodities front, Oil (NYSE:USO) fell to $96.57 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,762.40 an ounce while Silver (NYSE:SLV) rose 1.53% to settle at $34.33.

Hot Feature: Labor Department: Jobless Claims Fell to 367K

Markets were mixed because:

1) Bernanke. Federal Reserve Chairman Ben Bernanke testified before the Congressional Budget Committee today, saying that, though the economy has recently shown signs of improvement, the pace of the recovery is “frustratingly slow,” thus leaving the economy “vulnerable to shocks,” including the debt crisis in Europe. However, his testimony spurred speculation that the Fed would be willing to begin another quantitative easing program — in which it would purchase Treasury bonds and other assets — should the economy take a turn for the worse.

2) Greece. The debt-ridden nation is said to be nearing a deal with private creditors that could see them accepting a writedown of up to 70 percent on the value of their Greek debt holdings, and is soon expected to enact the necessary measures to receive its second, 130 billion-euro bailout from its troika of lenders. That bailout will ensure that Greece is able to make a 14.5 billion-euro debt payment on March 20. However, a European Union official speaking on condition of anonymity has come out and said that Greece will need another 15 billion euros if it is to reduce its debt to a manageable level.

3) Retail. Twenty retailers tracked by Thomson Reuters released January same-store sales figures today, together notching a 4.2 percent sales gain when economists had projected 2 percent growth. Costc0 (NASDAQ:COST), Target (NYSE:TGT), Kohl’s (NYSE:KSS), and Saks (NYSE:SKS) were among the retailers whose January sales beat expectations, but roughly a third of the retailers reporting today fell short, including Nordstrom (NYSE:JWN), Macy’s (NYSE:M), Dillard’s (NYSE:DDS), and the Bon-Ton Stores (NASDAQ:BONT).

BONUS: Merkel Asks China to Help with Euro, Iran

Friday

Markets closed up on Wall Street: Dow +1.23%, S&P +1.46%, Nasdaq +1.61%, Oil +1.43%, Gold -1.77%.

On the commodities front, Oil (NYSE:USO) rose to $97.74 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,728.20 an ounce while Silver (NYSE:SLV) fell 1.64% to settle at $33.62.

Hot Feature: Obama Administration to Shut Down Fannie and Freddie

Markets were up because:

1) Jobs. Labor Department today lowered the U.S. unemployment rate by two-tenths of a point to 8.3 percent, the lowest it’s been since February 2009. January data showed nonfarm payrolls to have risen a whopping 243,000, wildly exceeding even the most optimistic of economists’ projections.

2) Services. The January installment of the Institute for Supply Management’s services index rose to 56.8, from a revised 53.0 in December, the highest level since February 2011. The services sector was shown to have expanded at a faster rate last month, boosted by new orders, while the ISM’s employment index rose from 49.8 in December to 57.4 in January, the highest level in six years.

3) Financials. Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS) led today’s rally despite being named in major lawsuits today, with Goldman alleged to have defrauded investors in a 2006 offering of mortgage-backed securities, while the former three have been accused by New York Attorney General Eric Schneiderman of fraudulently using an electronic mortgage database to avoid the need for recording mortgage transfers. Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) also joined in the rally, each rising more than 3 percent.

BONUS: Crime Notes: NY Sues Major Banks Over Mortgage Registry, Goldman Faces Class Action.

To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com