• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Wildest week on Wall Street ends on up note

Relative calm was seen on Wall Street on Friday after four days of record-setting swings. Stocks were up most of the morning, fueled by a positive retail sales report.

August 12, 2011 12:00:00 AM PDT
After four days of record-setting swings, the wildest week in Wall Street's history ended on an up note, fueled by a positive retail sales report.

The Dow Jones industrial average finished Friday with a gain of 125 points. Most other times it would have been a fairly big day. By this week's standards, it was a sleeper.

A lot of volatility was seen this week, and some experts say the big swings can be attributed in part to lightning quick computer trading.

The speed of the changes can be overwhelming for many traders and dangerous. The computers can respond much faster than the average investor.

"These swings are so large that your order might hit the market at the wrong time, so you end up paying much more than you should if you're buying, or you end up getting much less than you should if you're selling," said George Feiger of Contango Capital Advisors.

Sales were up by half a percent, which is the largest amount in four months, and a lot of the sales came at car dealerships.

The report is important because consumer spending is 70 percent of the U.S. economy. But a survey on consumer sentiment fell to its lowest level in more than 30 years. And a separate report showed that businesses increased their stockpiles in July by the smallest amount since May 2010.

"The high level of unemployment and the length of unemployment is a real hindrance not only to people being able to get back to work, but also in the confidence of people to spend money," said Greg McBride, vice president of Bankrate.com.

Markets in Europe were also higher following rule changes that ban the short selling of some stocks. France's benchmark index, the CAC-40, rose 3.4 percent despite news that the nation's economy hit the brakes in the second quarter as exporters' wares piled up and consumers held onto their money.

Experts are reminding investors that while the stock market can be a good guide to where things are going, the market does not always move at the same speed as the economy.

"The stock market and the economy, they march at different speeds, and sometimes they march at different drummers," McBride said.

It was the first time in more than a month that the market has risen two days in a row. The Dow and the S&P last rose for two trading days on July 6 and 7.

The Associated Press contributed to this report.

Load Comments