Last Week In Review

From Barrons
THE STOCK MARKET'S RALLY OFF ITS JULY 15 LOW SPUTTERED, yet Wall Street heaved a small sigh of relief.
For a start, last week's pause was just benign enough to keep the recent bounce alive, even if the bullish momentum had begun to flag. The biggest setback came Thursday when the Dow Jones Industrial Average skidded 283 points after the release of data showing sales of existing homes had plunged in June toward a decade low. Yet the blow was blunted by uninspired volume; 6.05 billion of New York Stock Exchange shares traded, compared with volume topping 7 billion when stocks turned around.
Financial stocks that had just pulled off a 31% six-day surge began to falter, absorbing a 6.7% drubbing that accounted for nearly half of the Standard & Poor's 500's Thursday decline. But a pullback like this "is not unusual following a rebound off a climactic low," notes Miller Tabak's chief technical market analyst, Philip Roth.
Most crucially, crude oil continued to burn off its recent speculative fumes and fell 4.8% to $123 a barrel. This third straight weekly slide left crude 15% off its recent peak and snapped a pernicious rise that had threatened consumers and weighed down stocks. These breaks in oil's uptrend and stocks' downtrend could still carry "enough momentum to rally the S&P 500 into the 1320-1340 range," argues Bespoke Investment Group.
The Dow ended the week down 126, or 1.1%, to 11,371, while the S&P 500 relinquished 3, or 0.2%, to 1258. The 500-stock benchmark had bounced nearly 5% from its mid-July intraday low of 1200 but remains 20% off its October peak. Technology and small stocks fared better: The Nasdaq Composite Index rallied for a second straight week after its six-week losing streak and added 28, or 1.2%, to 2311. The Russell 2000 index rose 17, or 2.5%, to 710.