As we’re now just days away from the next Federal Reserve meeting, fear, concern, and, most importantly, uncertainty ran rampant this past week on Wall Street, causing the three major indexes to fall lower over the past five trading sessions. The Dow Jones Industrial Average lost 177 points, or 1.16%, and now sits at 15,070, after it briefly dipped below the 15,000 mark this week during intraday trading. The S&P 500 finished the week lower by 1.01%, while the Nasdaq was the big loser, after it declined by 1.31%.
A number of mixed economic data points were released during the week, which didn’t give investors any true indication of whether the economy is any better than it was before the last Fed meeting, or whether the central bank will now begin slowing its stimulus programs.
Before we hit the Dow losers, for the second consecutive week the index’s biggest winner was Pfizer Inc. (NYSE:PFE). After gaining 3.78% two weeks ago, the stock rose another 3.11% this past week. The main catalyst for the move higher was the announcement that Pfizer Inc. (NYSE:PFE) and Takeda had come to a settlement agreement with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Sun Pharmaceutical relating to a patent infringement case. The settlement amount came to $2.15 billion, of which Pfizer Inc. (NYSE:PFE) will receive the lion’s shares of and the rest will go to Takeda. This settlement is for more money than both Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Sun made on the sale of their drugs that infringed on the patent, so this should help keep the generic-pharmaceutical companies at bay for some time.
The big losers
The worst-performing Dow component of the week was American Express Company (NYSE:AXP), which lost 5.24% of its value. The stock probably moved lower for a number of reasons this week, including a stock downgrade, a poor initial stock rating from another firm, a weak consumer sentiment number, and rioting in the Middle East. The downgrade came from Barclays, which lowered the rating from “overweight” to “equal weight” but increased the price target from $72 to $82 per share. Oppenheimer also gave the company a less than stellar rating, as it initiated coverage on American Express Company (NYSE:AXP) this week and rated the stock a “perform.” The weak Thomson Reuters/University of Michigan Consumer Sentiment Index may indicate that Americans will cut back on spending and the use of credit, which will have a negative effect on American Express Company (NYSE:AXP) and the other credit card companies. And lastly, the rioting in Turkey this week may hurt American Express Company (NYSE:AXP), as it earns a great deal of revenue from the tourism industry, and with Istanbul being such an important tourist destination, revenues may take a hit.