Weekly Market Recap: General Electric, Google and Intel Earnings, Greece Debt Negotiations

DJIA 12,720 S&P 500 1,315 Nasdaq 2,786 Gold 1,658 Oil 98

The S&P 500 (NYSEARCA:SPY), Dow Jones Industrial Average (NYSEARCA:DIA), and Nasdaq (NASDAQ:QQQ) crossed some interesting bullish levels this week. On the commodities front, Oil (NYSEARCA:USO) made a full roundtrip back to $98, and Gold (NYSEARCA:GLD) continued to see some more buying.

Trending Now: Big Banks Report Mixed Results in Weak Earnings Season.

Now, for our analysis of the 12 reasons markets moved this week:

Tuesday

Today’s markets were up because:

1) Data. A government report today showed China’s economy to have grown at an annual rate of 8.9% in the last three months of 2011, faster than economists had expected. Investors were also encouraged when a German sentiment index came in better than expected, and a New York regional manufacturing index topped expectations thanks to strength in new orders and employment. The three pieces of news, which positive signs for three of the biggest economies in the world, supported global stock markets today, helping investors shrug off Standard & Poor’s downgrade of nine euro-zone governments and Europe’s bailout fund.

2) Greece. A Fitch Ratings official told Reuters today that, “Greece is insolvent so it will default.” Greek officials and private investors are set to resume debt talks on Wednesday after negotiations broke down last week over the interest rate on new bonds Greece will offer and a plan to enforce investor losses. Without the so-called “PSI” deal, which would see Greece’s creditors voluntarily giving up a lot of of their promised returns, the EU and IMF have warned that they will not consider Athens’ debt to be back on a sustainable track and will not release further aid. Greece’s private creditors have warned that a deal must be reached soon if the government is to avoid a disorderly default when a major bond redemption comes due in late March.

3) Banks. Despite a broad rally, bank stocks are down today on lackluster earnings reports from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C). Bank of America (NYSE:BAC) was down around 2 percent today, as was Morgan Stanley (NYSE:MS), which recently announced it willcap immediate cash bonuses at $125,000 this year as the firm curtails pay and defers more compensation for senior executives. Wells Fargo (NYSE:WFC) was the sole gainer of the major banks after reporting that its income rose 20 percent in the fourth quarter as its mortgage business steadied and deposits grew.

BONUS: FDIC to Vote on Bank Stress Test Proposal

Wednesday

Today’s markets were up because:

1) EuropeThe International Monetary Fund is seeking to boost its war chest by $500 billion. IMF Managing Director Christine Lagarde said yesterday that her staff are studying options for more than doubling the size of the fund’s lending capacity in order to better insulate the global economy against Europe’s debt crisis after identifying the potential for a $1 trillion global financing gap in the next two years. Greek government officials also resumed talks with the group representing private sector investors and banks today. Institute of International Finance director Charles Dallara, who represents the private sector in negotiations, said that final terms could be reached within days, ensuring that private holders of Greek bonds accept a writedown that cuts Greece’s debt load by more than a quarter.

2) Housing. Investors were encouraged by a better-than-expected housing report today, which showed builder confidence in the market for newly built, single-family homes to have climbed four points in January as employment and consumer confidence slowly improved in a growing number of markets and builders witnessed greater interest among potential buyers. The NAHB/Wells Fargo Housing Market Index, or HMI, rose to 25 points in its fourth consecutive month of gains to the highest level the index has attained since June 2007.

3) Goldman. Despite reporting fourth-quarter revenue well below expectations, Goldman Sachs (NYSE:GS) shares shot up almost 7 percent today after the firm reported earnings that beat forecasts and CEO Lloyd Blankfein said in a statement that he is seeing “encouraging” signs of improvement in the market and economy. Goldman’s results come just one day after Citigroup (NYSE:C) missed earnings estimates and Wells Fargo (NYSE:WFC) met expectations with its fourth-quarter report. Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) will report on Thursday.

BONUS: Manufacturing Rebound Boosts U.S. Industrial Production

Thursday

Today’s markets were up because:

1) Data. The government released housing, unemployment claims, and inflation figures today, delivering mixed messages about the state of the economic recovery. Initial claims for unemployment benefits fell by 50,000 last week to 352,000 — the lowest level since April 2008, but a separate report showed housing starts declined 4.1 percent in December as falling home prices and ongoing foreclosures continued to hamper an industry-wide recovery. The government’s key measure of inflation, the Consumer Price Index, showed prices to be relatively unchanged from November to December.

2) Europe. Investors will stay focused on Europe this week as Greece continues negotiations with private creditors on the size of the writedown they will accept on their sovereign debt holdings. Yesterday, news that the International Monetary Fund would seek to increase the size of its war chest helped markets rally, while Spanish and French bond auctions today drew solid demand, calming fears about Europe’s ability to fund its debt.

3) Banks. Bank of America (NYSE:BAC) led the Dow higher today after posting fourth-quarter net income of $2 billion and revenue that topped expectations. Morgan Stanley (NYSE:MS) posted a loss, but not so deep as analysts had expected, and shares spiked over 5 percent. The news helped lift Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) about 1 percent after they filed disappointing results earlier this week.

Friday

Today’s markets were up because:

1) Housing. Sales of previously-owned homes rose for the third consecutive month in December, reaching an 11-month high as the supply of properties on the market dropped to a near 7-year low, the National Association of Realtors reported today, signaling a recovery in one of the worst areas of the U.S. economy since the recession began in 2008.

2) GE. General Electric (NYSE:GE) a conglomerate with its hands in everything from jet engines and wind turbines to home appliances and home mortgages, is a sort of economic bellwether. And as such, its earnings reports can signal trends in everything from industry to finance. On Friday, GE reported higher fourth-quarter profits, but revenue slumped 8 percent, due in large part to weakness in European sales. Earnings in energy infrastructure were relatively unchanged, while revenue in GE’s industrial businesses rose 10 percent. The company’s revenue was held back by a 9 percent decline at its GE Capital unit, largely because the credit crunch forced GE to begin to scale back the division.

3) Tech. Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and IBM (NYSE:IBM) posted solid fourth-quarter earnings after the bell on Thursday, but Google (NASDAQ:GOOG) badlymissed Wall Street’s expectations, plunging more than 8 percent and weighing down the Nasdaq. Intel was up nearly 3 percent, IBM climbed about 4.5 percent, and Microsoft was up more than 5 percent.

BONUS: Governments Rob Tax Payers of Billions to Fund Ill-Advised Incentive Programs.

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