Although this past week was slightly shorter than most due to the long holiday weekend, it was still filled with drama and excitement. The Dow Jones Industrial Average (Dow Jones Indices:.DJI) opened sharply higher on Tuesday, and managed to close up 106 points for the day, but on Wednesday, the blue chip index closed lower by 106 points. Thursday seemed like it would be a good day until just after 2:56 p.m. EDT, at which point the Dow Jones Industrial Average (Dow Jones Indices:.DJI) began its 73-point decline before closing up just 21 points for the day. Then Friday came along, and while the decline didn’t come till late afternoon, the day started with the Dow flat, but the fall lasted nearly two hours. When all was said and done, the index had lost 208 points on the last day of the week.
All in all, the Dow Jones lost 187 points, or 1.22%, this past week, while the other major indexes also closed out the last week of May on a down note. The S&P 500 declined by 1.16%, and the Nasdaq slid lower by just 3.23 points, or 0.09%.
Before we hit the Dow Jones Industrial Average (Dow Jones Indices:.DJI) losers, let’s look at the big winner of the week — Bank of America Corp (NYSE:BAC). The Wall Street bank saw shares rise 3.17% during the short trading week despite the continued Countrywide problems hanging around its neck. One reason why shares may have increased this past week is rising interest rates. Although the bank has been able to borrow funds cheaply for some time because interest and mortgage rates were also being held down, the spread between what Bank of America Corp (NYSE:BAC) borrows at, and then lends at, has been low. Now that rates are climbing higher, the spread is widening, which means that the bank will make a larger profit on basic banking transactions that carry low risk compared to what the Wall Street firms were doing just a few years ago.
The big loser’s
Pfizer Inc. (NYSE:PFE) lost 6.23% this past week, with the largest one-day decline coming on Friday after the stock was hit with a trifecta of problems. First, the health-care industry had a rough day, in general, led by UnitedHealth, which lost 3.14% during the regular trading session during the day. Second, the stock was given a 12-month price target of $27 per share by an analyst at SunTrust. And lastly, rising interest rates is having a negative effect on stable high yielding blue-chip stocks, as investors leave riskier equities in favor of risk-free Treasury bonds, which are currently paying nearly identical yields as the Pfizer Inc. (NYSE:PFE)’s 3.3% dividend. The interest-rate pressure was a running theme within the Dow this week, as all three of the top losers likely experienced investors bailing on stable stocks in favor of the “safety” of bonds.
The biggest Dow Jones Industrial Average (Dow Jones Indices:.DJI) loser this week was consumer facing, slow growing, blue-chip stalwart The Procter & Gamble Company (NYSE:PG). Shares of The Procter & Gamble Company (NYSE:PG) had risen the first four weeks of May, but the streak abruptly came to an end this past week with shares losing 6.25% over the past four trading sessions. That is also the largest one week decline the stock has seen in 2013, slightly beating the 5.31% decline the stock experienced the last week of April after the company reported lower-than-expected first-quarter revenue, and management lowered its forecast for the remainder of the year.