Financial Week in Review: Stocks strong, Europe jittery, housing recovers

Stocks Strong. We’re now well into earnings season on Wall Street. If last week was Finance Week, when we heard from the big banks and financial institutions, this week was Technology Week. We got earnings reports from United Technologies, Honeywell, Google, IBM, and Apple. Google and IBM topped expectations, but Apple—while revenue was up significantly—failed to meet analyst's expectations. Apple’s results drove down its stock—and weighed on the tech-heavy Nasdaq, even while the S&P 500 and the Dow saw five-year highs.

Europe Jittery. Because the U.S. markets were closed for the Martin Luther King holiday, more people turned their attention overseas. European shares hit two-year highs this week. A bold plan from the Bank of Japan to deal with that country’s economic stagnation also cheered the markets. But all was not well there. Spain’s unemployment hit 26 percent, and Prime Minister David Cameron said he would ask his fellow Britons to vote on the U.K.’s continued participation in the European Union, although that vote won’t come until at least 2015.

Housing Recovers. The value of American homes climbed 5.9 percent in 2012, the largest annual gain since the summer of 2006, according to data released Tuesday by real-estate information provider Zillow Inc. The final three months of 2012 marked five consecutive quarters of U.S. home value appreciation, and the near 6 percent annual jump is roughly double the historical average that has home values climbing about 3 percent a year, Zillow said. In 2013, the company forecasts U.S. home values rising 3.3 percent, more in line with historical norms.

Closing The Week Strong. Good news on Thursday from two important economic indicators. First, factory activity grew the most in nearly two years in January. The monthly Purchasing Managers Index rose to 56.1, the best showing since March 2011. Any reading above 50 indicates expansion in the manufacturing sector. Also out on Thursday were the weekly unemployment numbers. The number of new claims for jobless benefits dropped to a five-year low last week. First-time claims for unemployment fell by 5,000 to 330,000. That’s the lowest since January 2008.