Weekly Market Outlook
Last week, all three major stock market indexes suffered losses. The Dow fell 1.1 percent, the S&P 500 fell 1.7 percent, and the Nasdaq fell 3.6 percent. For the month, the Dow was down 3.5 percent, the S&P 500 was down 3.7 percent, and the Nasdaq was down 5.4 percent.
Although corporate fourth-quarter earnings continue to surpass analysts’ estimates for nearly three out of four companies reporting, the news is not enough to sustain the market growth seen in the previous three quarters.
Uncertainty over political and economic issues seems to weigh heavily on investor sentiment. As the economies of Portugal, Spain and Greece struggle, investors worry about the possibility of defaults on sovereign debt. And unemployment in the U.S. remains a major stumbling block to expanding economic recovery.
On Monday, the Institute of Supply Management will release its manufacturing report for January. The figure is expected to come in at 55.2, slightly above the December reading, indicating expansion for the sixth consecutive month. Two days later the Institute will release its service sector report, and analysts hope to see a figure that finally indicates sector growth.
On Tuesday, pending home sales data for December will be released. Expectations are that the figure will rise by 1.5 percent, but that follows November’s large 16 percent drop.
On Friday, the non-farm payrolls data will be released. Although analysts expect a small number of new jobs to be added, the unemployment rate is expected to remain at ten percent.
Nine Stocks to Watch
The overall market has been week in January with few strong stocks to watch. Nine Big Caps are still poised for strong gains with market and sector strength. The nine stocks we’re watching:
Equifax Inc. (EFX)
General Mills, Inc. (GIS)
Genworth Financial, Inc. (GNW)
Integrys Energy Group, Inc. (TEG)
Polo Ralph Lauren Corporation (RL)
Southwest Airlines Co. (LUV)
The Boeing Company (BA)
Tyco Electronics Ltd. (TEL)
W.W. Grainger, Inc. (GWW)
Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.
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