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Bulls stay on vacation

Friday, August 16, 2013 - 02:01

Aug. 16 - Summary: Dow has worst week of the year as retail worries grow; Housing starts slower than anticipated; Legal setback for Icahn; J.C. Penney, Ackman set get-out terms; Pandora sings after upgrade. Conway G. Gittens reports.

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Where, oh, where are the buyers? Investors found little reason to interrupt their summer vacations, making for the worst week for blue chips this year. The Dow and the S&P 500 closed down. The Nasdaq tried to avoid the same fate but gave in. As for that weekly fall - blue chips tumbled 2.2 percent and the Nasdaq 1.6 percent. Gold may be indicating just how weary investors have become. Gold prices setting a two-month high on Friday. Housing starts bounced back in July from a big drop the month before. Though the number of new home construction projects was not enough to meet expectations, it was enough to soothe concerns the housing sector is headed for a major slowdown. But the market wasn't unanimous on which homebuilders will benefit. Lennar and Pulte moved higher but Toll Brothers and KB Home headed lower. More to worry about when it comes to the American shopper. Consumer sentiment fell this month to a four-month low; a recent spike in mortgage rates is making shoppers uncomfortable. And speaking of rates - looks like the yield on the 10-year note continues its march towards 3 percent. Updates on corporate arm wrestling: Carl Icahn's legal bid to stop Michael Dell from taking the PC company private denied by a judge - that means Icahn will have to wait for a shareholder vote in September… And J.C. Penny has hammered out a deal with Bill Ackman, its largest shareholder, if he decides to sell out of his stake. No word yet on if and when he will do so, but if he did it now, he would lose more than $300 million. In other corporate news, Pandora is at the top of the charts. Goldman Sachs - upgrading the stock. It predicts Pandora's revenues will increase as the streaming music service improves its sales force and local advertisers warm up to buying on the web. Wrapping up with a look at Europe - stocks took an upward path as investors focus on a rebounding economy.