The Economic Data That Moved the Markets This Past Week

While individual stocks typically move on company-specific news, when the major indexes make big moves, it's usually due to macro events or economic data reports that give investors a snapshot-like view of how the economy is performing. Let's look at what events and reports from last week helped push the Dow Jones Industrial Average (DJINDICES: ^DJI  ) higher by 328 points, or 2.17% -- enough for the index to set a new all-time closing high on both Thursday and Friday.

Monday
Not a whole lot happened during the day Monday, but after the closing bell rang, Alcoa (NYSE: AA  ) released its second-quarter earnings report to unofficially start earnings season. The aluminum producer surprised a lot of observers by slightly beating analysts' expectations for earnings per share, though it missed on expected revenue. Alcoa isn't be the bellwether it used to be, but many investors still look at the company for an indication of what's to come for earnings season.

Tuesday
On Tuesday, we got some mixed news. First, the Bureau of Labor Statistics' job-opening numbers showed a 1.4% increase in May. Companies are hiring, and the nation's unemployment rate could soon begin falling. On the other hand, a National Federation of Independent Business report showed that small-business optimism fell in June. Small business is the backbone of the jobs market, but it's possible the good and bad news combined to cancel each other out, in terms of any effect on stocks Tuesday.

Wednesday
Wednesday was a big day, with the Federal Reserve releasing its meeting minutes in the afternoon and seeming to confuse investors more than helping them understand the Fed's plans. Half of the board members think the Fed's quantitative easing program should end sometime later this year, while the other half thinks the $85 billion bond-buying should continue until we either see signs of inflation or a meaningful impact on the jobs market.

Chairman Ben Bernanke stepped in to clear things up during a press conference after the markets closed, saying there won't be any changes to the Fed's current stimulus programs without letting investors knowing when the changes coming -- and he said that won't be anytime soon. Those comments calmed nervous investors on Wednesday evening, and the markets reacted positively on Thursday. 

Thursday
Positive feelings about how the Fed will continue to stimulate the economy and push investors into stocks was enough to overcome a discouraging report on initial jobless claims. The report said claims jumped to 360,000 last week, a rise of 16,000 and a level we haven't seen for nearly two months. Most economists had estimated that claims would rise during the week, but only by a few thousand, to 349,000 from 344,000. Investors may have taken the news as a good thing, however, since it may push the end of the Fed's stimulus programs further down the road.

Friday
Investors were hit with two major economic data points and two big earnings reports on Friday. As my colleague John Maxfield indicated, both JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) reported stellar quarters. JPMorgan easily beat estimated earnings per share by $0.15, while Wells topped expectations by $0.05.

The two economy reports were the U.S. producer price index and the Thomson Reuter/University of Michigan preliminary consumer confidence index reading. Meanwhile, the producer price index showed an increase of 0.8% in June, primarily from higher costs for vehicles and oil. The report also indicated that while inflation is still in check, it is beginning to rise, with the 12-month reading of core inflation creeping higher from 1.6% to 1.7% in June.

Finally on Friday, the Thomson Reuters/University of Michigan consumer sentiment report indicated a slight drop in July to 83.9, from 84.1 in June. After hitting a six-year high in May, the index has now fallen for the past two months.