Free Market Update for the Week of July 12, 2010

Presented by Mark Lund, The Investor Coach.

QUOTE OF THE WEEK:
“Each morning when I open my eyes I say to myself: I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it.” – Groucho Marx

Service sector grows; pace of expansion moderates
Last week, the Institute for Supply Management reported its June non-manufacturing index at 53.8. The index had come in at 55.4 in March, April and May. So we are still seeing growth in the service sector, just at a slightly slower rate. Economists polled by MarketWatch were expecting a 54.5 reading. The 53.8 is the lowest mark since February, but the index has been above 50 (indicating growth) all year.¹

Continuing unemployment claims reach a 9-month low
Thursday, the Labor Department announced that 4.41 million people were receiving jobless benefits after an initial week of aid during the week of June 26. That is the lowest such figure since November.²

Sales up 3.1% over last year at major retailers
That’s what a Thomson Reuters survey of 28 big mall chains just found – June retail purchases at these shops were 3.1% better than in June 2009. The most notable year-over-year gain among the 28 store brands? Nordstrom’s, where sales were up 14.1% in June from 12 months ago.³

Wholesale inventories build in May
They increased 0.5% in that month as wholesale sales fell 0.3%. In year-over-year figures, the Commerce Department said stockpiles were down 2.1% from May 2009, while wholesale sales had increased 15.1%.⁴

Bulls stampede as confidence returns
The first glimmer of a new earnings season and good news about jobless claims motivated buying on Wall Street. Last week, the DJIA gained 5.28%, settling at 10.197.72 Friday; the NASDAQ and S&P 500 respectively gained 5.00% and 5.41% in the best week in nearly a year for stocks.⁵

Note: last week’s article mentioned that the federal homebuyer tax credit had been extended through September 30. Please note, however, that only the credit has been extended – not the deadline for contracts. The deadline to buy (or enter into a binding contract to buy) a principal residence was April 30.⁶

Last week’s riddle: It can certainly be measured, yet it has no length, width or height. What is it?

Last week’s riddle answer: The temperature.

Citations.
1 – marketwatch.com/story/us-service-sector-weakens-a-bit-in-june-2010-07-06 [7/6/10]
2 – cnbc.com/id/38144446/ [7/8/10]
3 – articles.latimes.com/2010/jul/08/business/la-fi-retail-sales-20100707 [7/8/10]
4 – online.wsj.com/article/SB10001424052748704075604575356804274113436.html [7/9/10]
5 – cnbc.com/id/38171128 [7/9/10]
6 – irs.gov/newsroom/article/0,,id=204671,00.html [7/6/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%9F2%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%9F2%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F9%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [7/9/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/9/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative’s Broker/Dealer. This information should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www