Stocks End Higher, But Fail to Stem Weekly Loss

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While Wall Street ended the day in positive territory, the markets closed out a choppy trading week with the steepest losses in more than a month as traders grappled with a slew of corporate, economic and political news.

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Today's Markets

The Dow Jones Industrial Average gained 44.8 points, or 0.36%, to 12,481, the S&P 500 climbed 7.5 points, or 0.58%, to 1,316 and the Nasdaq Composite rose 27.3 points, or 0.99%, to 2,790. The FOX 50 tacked on 4.7 points ending at 929.8.

For the week, the blue chips shed 1.4%, the broad S&P 500 slid 2% and the Nasdaq dipped 2.4%.

Key among the deluge of economic reports released on Friday was a much weaker-than-expected read on the consumer sector.  Consumers are a large component of economic expansion and their buying habits often relate to their views on the state of the economy.

Consumer sentiment was the lowest in early July since March 2009. The Reuters/University of Michigan consumer sentiment gauge fell to 63.8 from 71.5 the prior month.  Economists had been expecting a reading of 72.5.

"This is just a terrible report," wrote Dan Greenhaus, chief global strategist at BTIG, in a research note. "Consumers are clearly impacted by the news headlines of late because the decline in gasoline prices, which pushed down inflation expectations, apparently did not impact the headline number."

Earnings season also kicked into high-gear this week, meaning traders had a number of quarterly reports from high-profile companies to review.

Citigroup (NYSE:C) unveiled second-quarter profits of $1.09 on $20.6 billion in revenue, besting estimates of 96 cents on $19.9 billion in sales.  JPMorgan Chase (NYSE:JPM), the first large U.S. bank to report, unveiled profits that easily topped analysts' forecasts.

Mattel (NYSE:MAT) revealed second-quarter earnings of 23 cents a share, zipping past estimates of 16 cents. The toy company's sales were $1.2 billion, topping forecasts of $1.1 billion.

Search behemoth Google (NASDAQ:GOOG) reported profits that blew past Wall Street's estimates after the bell on Thursday, sending shares zooming higher by more than 13% on the day.

The European Banking Authority said eight of ninety banks failed tests to see if they would be able to withstand a financial panic.  Those banks need to raise roughly $3.5 billion in capital, the EBA said.  Seven of the eight banks were based in Spain and Greece, both of which have been the subject of sovereign debt concerns, and one was in Austria. Banks use certain types of safe capital as a cushion in case of a financial shock.

The euro fell 0.06% against the U.S. dollar in very choppy trade.

Also on the economic front, prices on the consumer level fell 0.2% in June, bigger than the 0.1% decline economists had anticipated.  Excluding the more volatile food and energy components, prices were up 0.3%, a quicker pace than the 0.2% Wall Street forecast.  Moderating energy prices were not enough to keep inflation completely tamed in June.

The first of the regional Federal Reserve manufacturing reports showed manufacturing in the New York region unexpectedly contracted in July. The Empire State Survey came in at -3.76, lower than estimates of 4.5.  Reading above 0 indicate expansion, while those below suggest contraction.

All of the regional Fed reports came in well below expectations in June, spooking the markets, but then a private report showed expansion in the sector, helping to boost confidence.

Markets shrugged off Standard & Poor's warning late last night that there is a 50% chance it will slash the United States' super-solid "AAA" credit rating in the next three months.  The move came on the heels of a similar move on Wednesday evening by Moody's.

Adding to the concerns, Standard & Poor's said Friday that entities directly linked to U.S. government debt may also be negatively affected by an American sovereign debt downgrade.

Lawmakers are still at an impasse on raising the debt ceiling. Without a deal to boost the limit on how much debt the U.S. can take, the government will have difficulty servicing its debt and paying benefits as early as August.

Energy markets were higher on the day.  Light, sweet crude jumped $1.55, or 1.6%, to $97.24 a barrel.  Wholesale RBOB gasoline rose less than a penny to $3.13 a gallon.

Prices at the pump have been on the rise this week.  A gallon of regular costs $3.67 on average nationwide, slightly down from $3.69 last month, but well higher than the $2.72 drivers paid last year, according to the AAA Fuel Gauge Report.

Gold gained 80 cents, or 0.05%, to $1,590 a troy ounce.  Silver jumped 38 cents, or 0.97%, to $39.07 a troy ounce.

Corporate News

Clorox (NYSE:CLX) received a takeover offer from billionaire investor Carl Icahn in a deal valued at $76.50 a share, or as much as $12.6 billion.

BHP Billiton (NYSE:BHP) will buy Petrohawk Energy (NYSE:HK) for $12.1 billion as it looks to tap into the shale gas sector.

Foreign Markets 

The English FTSE 100 fell 0.06% to 5,844, the French CAC 40 slid 0.66% to 3,727 and the German DAX rose 0.07% to 7,220.

In Asia, the Japanese Nikkei 225 gained 0.39% to 9,974 and the Chinese Hang Seng fell 0.3% to 21,875.

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