Weekly Free Market Update for October 12, 2010

Presented by Mark Lund, The Investor Coach.

WEEKLY QUOTE
“The digital revolution is far more significant than the invention of writing or even of printing.”
– Douglas Engelbart

JOBS REPORT COULD PROMPT FED RESPONSE
The U.S. economy shed 95,000 non-farming jobs in September – mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.¹

PENDING HOME SALES UP 4.3% FOR AUGUST
The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.²

SERVICE SECTOR GROWTH RATE INCREASES
The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.³

TWO BIG BANKS HALT FORECLOSURES
Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank of America decided last week to extend its freeze on foreclosures to all 50 states. PNC Financial Services Group also announced last week that it was halting foreclosure sales for one month.⁴

FACTORY ORDERS HINT AT COMPANIES UPGRADING
In August, orders for non-military capital goods excluding aircraft rose 5.1%. This marks the best month for such orders since March 2010, according to Commerce Department data. Overall capital goods orders declined by 0.5%.⁵

DOW CLOSES NORTH OF 11,000
The index gained 1.63% last week to settle Friday at 11,006.48 – the first close over 11,000 since May 3. The NASDAQ advanced 1.31% on the week to settle Friday at 2,401.91. The S&P 500 closed at 1,165.13 Friday after a 1.65% weekly gain.⁶

COMING NEXT WEEK: minutes from the 9/21 FOMC meeting (Tuesday), new jobless claims figures and September PPI (Thursday), and then a plethora of reports to digest on Friday – September CPI, the preliminary October University of Michigan consumer sentiment survey, and new data on retail sales and business inventories.

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov – 10/8/10^6,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY RIDDLE
I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?

Last week’s riddle:
Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two were left. How many apples were originally in the bag?

Last week’s answer:
Six. He had six apples to start with, and ate two the first day and two the second day.

Citations.
1 – marketwatch.com/story/us-economy-sheds-95000-jobs-in-sept-2010-10-08?dist=beforebell [10/8/10]
2 – realtor.org/press_room/news_releases/2010/10/pending_show [10/4/10]
3 –ism.ws/ISMReport/nonmfgROB.cfm [10/5/10]
4 – bloomberg.com/news/2010-10-08/bank-of-america-extends-freeze-on-foreclosures-to-all-50-states.html [10/8/10]
5 – bloomberg.com/news/2010-10-04/u-s-capital-goods-orders-climb-more-than-estimated-as-equipment-replaced.html [10/4/10]
6 – cnbc.com/id/39580603 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/8/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/8/10]
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.