MarketWatch top 10 stories August 13 - 17
A previous version of this story contained an incorrect spelling for the Iranian city of Natanz. The story has been corrected.
NEW YORK (MarketWatch) -- U.S. stocks ended the week higher on Friday in a session marked by low volatility and low volume as market makers vacationed, the European crisis cooled and domestic economic data showed some improvement.
As the second-quarter earnings period draws to a close, of the 475 companies in the S&P 500 that have reported earnings to date, 68% have reported results above analyst expectations, according to data from Thomson Reuters.
That's higher than the long-term average of 62% and matches the average over the past four quarters of 68%.
But only 41% of companies have reported second-quarter revenue above analyst expectations. This is lower than the long-term average of 63% and lower than the average over the past four quarters of 64%, Thomson Reuters said.
Tech stocks led the news most of the week as
On the downside, recent high-profile firms like
On the political front, news that Republican presidential candidate Mitt Romney tapped Wisconsin's Paul Ryan as his running mate had little effect on the markets.
The latest week saw a flood of U.S. data hit the market. Most was classified as benign to positive for the economic outlook, but the recent choppiness in the data flow left investors vary of going all-in on the news.
The news from one side of the jobs picture continues to get better. The four-week average of first-time initial jobless claims -- basically, layoffs and firings -- has dropped by about 20,000 over two months.
Home-builder sentiment in August reached the highest level in more than five years. Yet, housing starts for single-family homes, though certainly on the mend, hasn't been nearly as strong. See weekly roundup in charts of economic indicators
The Dow Jones Industrial Average (DJIA) closed the week up 0.5% at 13,275. The tech-heavy Nasdaq Composite (COMP) rallied 1.8% to end the week at 3,077.
The S&P 500 (SPX) ended Friday at 1,418, up 0.9% on the week.
U.S. Week Ahead: Germany and Greece in focus
Europe's Week Ahead: Glencore, Heineken, euro
Iran threatens to disconnect from the Internet
A recent hacking incident at an Iranian nuclear facility follows a spate of other attacks on Iranian infrastructure, including the Stuxnet "cyberweapon," which infected systems at the Natanz nuclear enrichment plant in 2010 and crippled several thousand centrifuges in the process. Now, it seems that the Iranians have had enough. In the past few weeks, Reza Taqipour, Iran's minister of communication and information technology, called the global Internet "untrustworthy" and announced plans to disconnect key government ministries from the World Wide Web by September. Read about Iran's threats to disconnect from the Internet.
Paul Ryan is the Holy Grail for Wall Street
Imagine if the big banks could design a dream ticket from today's crop of politicians. Could it do any better than the Republican tandem of former Massachusetts Gov. Mitt Romney and Rep. Paul Ryan of Wisconsin? Romney's experience at Bain Capital makes him probably the most investment-friendly candidate in history. And so far he's delivered, promising to keep tax breaks for investors and the wealthiest Americans. Read David Weidner's Writing on Wall column on Ryan.
When will the euro collapse? It's already dead
Anyone who spends their time analyzing the euro-zone debt crisis will know that there is one question you get asked again and again. When will the single currency finally collapse? In reality, whether it is a few months or a decade away doesn't make as much difference as you might suppose. Why not? Because in most of the ways that actually matter, the euro is already dead. Read Matthew Lynn's London Eye on the zombie euro.
11 reasons to leave your 401(k) behind
If you lose your job or leave your employer, many people will tell you to roll your 401(k) into an IRA. But experts say that might not always be prudent, and that there are plenty of reasons to leave your 401(k) with your former employer. Read more Robert Powell retirement advice, on MarketWatch
Trading volume drop can't just be blamed on summer
Trading in the stock market has slowed to a somnolent pace, even after accounting for all the traders and hedge-fund managers escaping to their vacation homes in the Hamptons. Get used to it. Volumes could bump along at below-average levels for another three weeks, as investors hang on to recent gains and avoid making big moves before what's seen as the next catalysts -- coming Federal Reserve and European Central Bank events. Read Market Extra on the recent volume pullback
Where to put money as you whistle past Wall Street
The ghosts of 2007 and 2008 still haunt the markets. The banking and housing sectors are both stronger, to be sure, but are vulnerable to market shocks and headline risk. Meanwhile, after suffering through two bear markets in the past 12 years, individual investors have lightened up on stocks in favor of bonds. So what is an investor to do? Read MarketWatch Weekend Investor column
Think twice before jumping on gold's bandwagon
Major investors have added to their stakes in physically-backed gold exchange-traded funds and central banks have bought the metal at a record pace -- good signs that gold is about to break out of its recent trading range, but not necessarily indicative of a major rally. That mentality is particularly worrisome given the uncertainty surrounding further QE, which helps stimulate the economy, devalue currencies and raise gold's safe-haven appeal. Read Commodities Corner, on MarketWatch
Investors in once-hot social media stocks such as Facebook, Zynga (ZNGA) and Groupon (GRPN) have gotten some painful lessons on the effects of supply and demand, which analysts say may hurt other Web firms contemplating an initial public offering. Facebook slumped more than 6% on Thursday, as about 271 million of the company's shares emerged from what is known as a post-IPO lockup. The stock slipped below the $20 mark to set a record low by the close. Read about the perils of tech IPO lockup expirations, on MarketWatch
The failure of supply-side tax cuts
Some 30 years after the Republican Party was smitten by supply-side economics, the Grand Old Party remains faithful to the creed, even if history hasn't been kind to the idea that tax cuts and deregulation alone will lead to a wondrous new era of American prosperity. Read Rex Nutting's column on the failure of supply-side tax cuts.
The case for supply-side
There is no better place to begin a new debate on solutions to America's economic problems than the fundamental question of whether lower taxes result in faster economic growth? Rex Nutting argued in his column that tax rates have at best a small effect on economic growth. I beg to disagree. The academic and empirical evidence is clear: Lower taxes result in higher economic growth, all other things being equal. Read Diana Furchtgott-Roth's column in favor of supply-side tax cuts.
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