As the pace of financial releases slowed, it was oil news all the time
last week, as the murky substance hit fresh 21-year highs amid supply
concerns. "We're pretty much through the earnings season and oil is everyone's
primary focus," said Evan Olsen, head of equity trading at Stephens Inc., to
Reuters News. "We've just got a very extreme inverse relationship to oil
futures." Not to be outdone, economists were taken by surprise by a measly
rise in July's payrolls by 32,000, the smallest increase since December. To
add insult to injury, the Labor Department also said employers created 61,000
fewer jobs in May and June than initially estimated. The report will surely
place more focus on this Tuesday's Federal Open Market Committee meeting,
where the Fed is expected to raise interest rates a quarter-point. However,
the weakening labor market could stem the pace of rate hikes later in the year
if job and other economic reports don't improve. Earlier last week, June's
personal spending figure displayed a much larger-than-expected decline, while
retail sales in July where generally weak. "Consumer spending is slowing down,
and it has been the major driver of the U.S. economy for six or seven years
now," said Rafi Zaman, head of U.S. stock investment at DuPont Capital
Management, to The Wall Street Journal. "Investors are sitting back and asking
whether that is going to be a major factor going forward." Corporate reports
did not add much hope, as the Nasdaq fell below the 1800 mark. Communications
equipment maker Ciena plunged, after it said its third-quarter revenues will
miss Street expectations. Within the chip space, Nvidia took a serious dive on
a decline in its quarterly earnings and revenue. This week, besides the FOMC
meeting, some tech heavyweights will report their financial reports, including
Cisco Systems and Dell.
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial.
SOURCE Thomson Financial Corporate Group
back to top
