Weekly Recap

With the Friday's market selloff, we are technically in the bear territory, characterized by a slide of 20% from the market highs of October 2007. The Dow Jones now sits at 11,346.51, having dropped 4.2% for the week, and S&P500 is at 1,278.38, having skidded 3% for the week. Few notable events from the last week:

• Credit fears returned, hitting financials again; Citigroup has been downgraded by Goldman. The big financial houses jumped on each other's throat: in addition to Goldman's downgrade of Citigroup (from Attractive to Neutral), Moody's warned about cutting ratings on Morgan Stanley, and Lehman raised its write-down estimates for Merrill Lynch. Fitch Rating Agency noted that some credit-card company losses have exceeded five-year averages. Hmmm!
  
• The consumer debt is increasing, as people's habits change slowly, even in the light of $5 gallon of gasoline, and rising food prices.
  
• The University of Michigan Consumer Confidence Index fell to a 28-year low in June. Ouch!
  
• The Fed kept the rates constant for now, but they said the risk of inflation has risen. Anybody venture to say when they will start increasing the rates? Not that the market needs another blow.
  
• Oracle (ORCL) and Research In Motion (RIMM) have delivered disappointing earnings news.
  
• General Motors plunged to a 53-year low this past week. No, not 52-week low, but rather 53-year low!! Should they file for bankruptcy, as Cramer preaches, or they are going to bounce back, and their shares triple, how Barron's depicted it in an article few weeks back?
  
• Much of the blame for the selloff is on the surging oil prices. Transportation stocks and many big names from the manufacturing and retail sectors have suffered amid oil's doubling in the past year. The oil's happy rise has spooked everyone from consumers to the Fed.
  
• Metal stocks, especially steel, have fared well. Same thing goes for a handful of mining and agriculture stocks.
  
• The yield on the benchmark 10-year Treasury note fell to 3.98%, down from 4.05% on Thursday.