The recent run on the indexes produced the best three-day gain (in percentage terms) on the S&P 500 since the spring of 2003. The press commented that it was therefore not too much of a surprise that investors took a pause from their buying activity today. In fact, over the first three days of this week alone, the major indexes booked major gains, amounting to 2.8% for the Dow, and 3.5% each for the S&P 500 and the NASDAQ Composite.

The spotlight returned to highlight the troubles in the subprime sector today, as an executive at Countrywide Financial – a California-based mortgage lender – announced before the Senate Banking Committee that foreclosures on subprime mortgages in 2006 could reach or surpass the previous record levels seen in the year 2000. In that year, the foreclosure rate was close to 10%.

Also exerting a dampening effect on the broad market was crude oil’s largest one-day advance in the last six weeks. Crude surged 3.5% and closed at roughly $61.70 per barrel. Traders believe gasoline supplies may be tight going into the upcoming “summer driving season”.

In the tech sector, Motorola came out with a surprising admission that it would show a loss for the first quarter. The company’s CEO said 2007 profit and sales would be 'substantially' below what had originally been anticipated. Motorola shares dropped to their lowest levels since the summer of 2005. The shares have lost about a third of their market value (amount to a greater than $20 billion loss of market cap) over the last 5 months.

Key economic data for the week starting March 19, 2007. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	10:00 Existing Home Sales for February: -1.7% / 3.0%

© HGH Associated Press

News Archive (from 1/1/2007 until 3/31/2007)