Financial market indexes in the U.S. fell broadly for the week of June 26. The main economic factors for the down week included a low reading on gross domestic product growth, a stagnant inflation report and increased volatility from international debt risks.
The Dow Jones Industrial Average was down 0.38% for the week with E.I. Du Pont De Nemours (DD, Financial) leading the index’s losses down 6.07% and technology stocks Cisco (CSCO, Financial) and Intel (INTC, Financial) following with losses of -3.27% and -2.58%, respectively. For the year the DJIA has gained 0.69%. The S&P 500 was down 0.40% for the week with the utilities sector leading the index’s losses at -2.34%. For the year the S&P 500 now has a gain of 0.94%. For the week, technology stocks were also lower. The NASDAQ fell 0.69% and the NASDAQ 100 was also down 0.65%.
On Wednesday the Bureau of Economic Analysis released its final estimate of GDP. In the final estimate GDP was revised to a seasonally adjusted average growth rate of -0.2%. The Bureau of Economic Analysis also released data on the PCE Index which showed the one-year inflation rate for May at 0.2% and the inflation rate excluding food and energy for May at 1.2%. Both reports continued to show the effects of lower oil prices and the strengthened dollar, two main factors that continue to drag on the U.S. economy’s growth.
Additionally, in Europe, political discussions on aid for Greece’s debt crisis seem unlikely. As debt payment dates near, Greece’s likelihood of default appears high. Banks in Greece are closed on Monday due to the country’s high risk. Without further aid the country will likely default and be forced to exit the Eurozone.
Signs of a stock market rally in the week ahead appear unlikely with only a four day trading week and ongoing volatility continuing from Greece’s debt crisis. The main focus for the week will be on U.S. employment data with the ADP Employment Report on the private sector reported on Wednesday and the Bureau of Labor Statistics’ Employment Situation Report released on Thursday. Economists are calling for a decrease in the unemployment rate to 5.4% and an increase in nonfarm payroll jobs of 230,000.
