Market Wrap-Up for September 4: The Week in Review

One word can sum up the market over the past week: volatility. Once again, the markets have been subject to another wild week of price swings. China and it’s potentially slower growth projections were on every investor’s mind as the nation’s rising and fading fortunes, as well as its stock prices, have caused major pain in the key stock benchmarks. The Dow, S&P 500 and Nasdaq all managed to finish in the red for the week.

Also on investors’ minds this week was the Federal Reserve.

Coming off the back of the Jackson Hole Summit, the Fed continued to digest this past week’s slew of economic data, including construction activity, Chicago PMI, and the Critical Jobs Report. Trying to gauge just when the Fed will raise interest rates also increased the week’s market volatility.

Finally, a slew of relatively disappointing earnings reports didn’t calm the rough seas in the markets either.

The last trading day in August came with a loud thud. Thanks to continued pressure from China, stocks managed to have their worst month since 2010. On Monday, the Dow Jones Industrial Average fell 114.98 points to reach 16,528.03. The S&P 500 and Nasdaq Composite saw similar declines, falling 0.8% and 1.1%, respectively. All in all, the Dow shed 6.6% for all of August, its largest percentage decline since May of 2010. Similarly, the S&P 500 fell 6.3% and the Nasdaq sank 6.9%. These were the worst monthly declines since May 2012.

In addition to the potential slowdown in China, the Chicago Purchasing Managers Index (PMI), a measure of factory activity, came in at 54.4 on Monday. While a reading above 50 still indicates expansion, the figure was below the 54.7 forecasted number.

• On the earnings-related front, Star Bulk Carriers Corp. (SBLK ) announced quarterly earnings per share of ($0.12). That loss was about 4 cents better than the analyst estimate of ($0.16).

September didn’t exactly start off with a bang either. A host of economic data, from both the U.S. and China, managed to clip the market’s wings once again. China’s official manufacturing PMI for August fell to its lowest level in three years. Here at home, the Institute for Supply Management’s (ISM) PMI, which is considered the gold standard for the U.S., unexpectedly fell to just 51.1, a decrease of 1.6 points from the July reading of 52.7. On a positive note, lower gas prices pushed vehicle sales, especially trucks and SUVs, higher to 17.8 million.

Needless to say, the markets were not pleased with the drop in economic data. The Dow Jones Industrial Average tumbled a whopping 469.68 points to 16,058.35. The S&P 500 declined 3% and the Nasdaq fell 2.9%.

• Bob Evans Farms (BOBE) announced quarterly earnings of 30 cents on Tuesday. The Ohio-based restaurant operator and packaged food producer has a dividend yield of 2.77%.

• Donaldson Company (DCI ) reported 4th quarter EPS of 45 cents. This number was 3 cents better than the analyst estimates of 42 cents. Additionally, revenues beat analyst projections. The filiation company yields 2.19%.

• H&R Block (HRB ) finished out earnings on Tuesday by reporting a loss of 35 cents per share. The loss was better than the consensuses estimates. HRB has a dividend yield of 2.33%.

Wednesday finally saw some relief with regards to the market’s recent major declines. The Dow Jones Industrial Average gained 293.03 points to hit 16,351.38. The S&P 500 increased by 35.01, while the tech-focused Nasdaq added 113.87 points. However, trading remained subdued, indicating that many investors were still wary about adding stocks back into their mix.

On the economic front, ADP non-farm employment numbers came in less than expected at 190,000. On the positive side, those with jobs are cranking more output. Productivity numbers showed a 3.3% increase, which managed to beat expectations by a wide number. Also, Wednesday saw the release of the Fed’s Beige book. While not as influential to Fed policy as the non-public Green Book and Blue Book, the report did paint a hazy picture of the economy.

There were no dividend-related earnings reported.

Despite a roaring start, stocks only managed slight gains on Thursday. The Dow was up nearly 200 points at one period, only to drift lower and finish with a gain of just 23.38 points. The S&P finished just slightly higher as well and the Nasdaq managed to close in the red. The dour news wasn’t China-related, although issues with Beijing still remain. This time it was U.S.-related as initial jobless claims, a proxy for layoffs and the newly unemployed, rose by 12,000 to 282,000 for the week ending August 29.

• Joy Global (JOY) has felt the full effects of China’s slowdown. The mining equipment maker reported Q3 EPS of 46 cents. That’s 16 cents less than analyst estimates. Likewise, revenues for JOY came in less than expected. The firm currently has a yield of 4.24%.

• Piedmont Natural Gas (PNY) also fared badly on the earnings front. The natural gas utility reported a loss of 10 cents per share. That loss was below analyst estimates as was PNY’s revenues. The utility currently yields 3.54%.

• Campbell Soup Company’s (CPB) earnings were mmm…mmm…good for investors. The firm reported a 1 cent earnings per share beat. CPB reported Q4 EPS of 43 cents, with revenues at $1.69 billion. The soup and prepackaged food manufacturer yields 2.57%.

Jobs. Jobs. Jobs. This Friday is all about the Critical Jobs Report. Economists think the employment report will show the economy added 222,000 jobs last month. That will push the unemployment rate down to 5.2% and give the Fed enough ammunition to begin raising rates in two weeks. Traders and investors are betting that this will happen.

S&P 500 futures are showing a 71-point decline ahead of the release. A rise in interest could be bad for stocks as safer bonds would now provide a higher return.

There were no dividend-related earnings reported this Friday.

Featuring a shortened trading week thanks to the Labor Day Holiday, next week will feature a key piece of economic data on Friday: consumer sentiment. Additionally, weekly unemployment claims will be announced. And despite being shortened, the week should be a volatile one as China’s market’s reopen from their break and investor’s digest any data before the Fed makes a decision.

Next week will see earnings from REIT Urstadt Biddle Properties (UBA ), grocery chain Kroger Co. (KR ) and workplace technology firm Brady Corp. (BRC ).