Market Deja Vu (Financial Week in Review, Aug. 15-19, 2011)

Break out the chocolate bars; it’s been another rough week for the markets. The major indexes on the NYSE all closed lower on Friday, and slipped further in after-hours trading. They were not alone. Markets all around the globe fell this week. It’s almost as though the week before last is repeating itself.

Trading started off strong on Monday, after a promising rally at the end of the previous week, thanks to news of mergers and acquisitions and hopes for a resolution to the debt crisis in Europe. The worst of the decline began on Thursday and stocks experienced another round of sell-offs before the close of the Markets on Friday. Even Blue Chip stocks such as Google, Apple, Verizon and General Electric were down at the close of trading. Hewlett-Packard stock sunk like a rock following its announcement that it may sell-off the PC, smartphone, and tablet portions of its business. HP also agreed to buy U.K. software giant Autonomy Corp. for a reported $10 billion. HP shares sank 20% after the announcement, dragging the Dow down with it. HP’s losses account for 45 points of the Dow’s decline. Meanwhile, computer hardware manufacturer, AMD, gained 3.28%, while rival, Intel, dropped 3%.

SILVER LININGS

American Express posted a modest gain of 0.43%,and McDonald’s and Walmart also finished higher.

Just in time for weary gas consumers, crude oil prices eased again, falling to $82.70 per barrel. U.S. Chevron gained 2.2% and Exxon Mobile lost 1.61%. In Europe, Shell oil dipped 2.4% and BP lost 2.5%.

Not surprisingly, the gold price rose again to a record high of $1,852 USD per ounce, as squeamish investors seek a safe haven. Silver gained 5.5 percent to $42.95.

OVERVIEW

Lack of growth in the global economy has been cited as a cause of decline in stock prices. Major U.S. indexes have been on a losing streak for the past month. In that month, the Dow slipped 15%, the S&P 500 dropped 16%, and the biggest loser was the Nasdaq Composite, which fell 18%.

The European markets fell on Thursday and Friday-some dropping to their lowest point since 2009. The Continent’s debt crisis is increasingly being viewed as a loose canon-a time-bomb which could go off without warning. European bank shares fell on Friday in the face of heavy sell offs. U.K. lender Lloyds Banking Group dropped 4.8 percent. One outstanding success story was Britain’s Autonomy Corp, whose stock shot up 72% after the announcement that it was being purchased by Hewlett-Packard.

U.S. financial heavyweights, Bank of America Citigroup, Chase, Morgan Stanley, Wells Fargo, and many other local and regional bank stocks, were a huge part of the Wall Street sell-off, amid speculation that embattled European financial institutions could affect stateside banks. Canadian banks were also hit hard, taking some of the worst losses on the Canadian TSX.

Mutual funds were a mixed bag. Long Government, Managed Futures and others were up, but Industrials, Technology, Small and Mid-Cap Growth funds were all down roughly 6%.

ON THE BOOKS

Barnes & Noble, the largest book retailer in the U.S, will receive a 204 million-dollar infusion of cash from Liberty media in exchange for a 17% stake in the company. Liberty had been looking into buying out Barnes and Noble since the book chain was placed on the market a year ago, and would have potentially owned 70% of the company. Their largest brick and mortar competitor, Borders, is presently liquidating its stock and closing all stores. Barnes and Noble stock closed down 17.45 percent at 9.98. U.S. retailer Sears lost $1.13 per share despite higher-than-projected revenue.

COLD, HARD CASH

The U.S. dollar weakened in comparison with the euro and the Japanese yen. The dollar fell 0.8% for the week, closing at 73.99, and the euro rose 1.1%. The Swiss franc, long considered a safe haven, remains strong. Recently, investors have been snatching up francs. This is creating more woes for debt-strapped central European countries, whose loans and interest rates are tied to the franc.

IN THE HOLE

Fed Chairman, Ben Bernanke, will be traveling to Jackson Hole, Wyoming, for the annual Central Bank conference. Bernanke is expected to recommend a third round of Quantitative Easing; however, he doesn’t have much leeway left. He is schedule to give a speech on Friday, August 26.

How global trading closed on Friday:

And apparently, this isn’t the end