Weekly Market News for the Week of August 31, 2009

Presented by Mark Lund, The Investor Coach.

Quote of the week. “In a society of super-sophisticated communication, we often suffer from a shortage of listeners.” – Erma Bombeck

Wages flat, but spending up. So says the latest data from the Commerce Department. Consumer spending rose 0.2% in July (the third straight monthly gain, in line with economists’ forecasts). Personal incomes were flat for July and 2.4% below levels of one year ago.1

New home sales way up. They increased 9.6% for July, the fourth straight monthly gain. According to the Commerce Department, the sales pace hasn’t been this strong since September. Inventory is shrinking: roughly 271,000 new homes were on sale at the end of July, a low not seen since March 1993.2

More demand for hard goods. July was a great month for durable goods orders. They rose by 4.9%, a third straight monthly gain powered by an 18.4% jump in transportation orders. Inventories fell by 0.8%.3

Taking the consumer’s temperature. The Conference Board’s consumer confidence index rebounded from a quite dismal 47.4 in July to 54.1 this month. The final August Reuters/University of Michigan consumer sentiment index was 65.7, hardly changed from July’s 66.0 mark.4

Good days for oil & gold. A decline in the dollar certainly aids the commodities markets. Gold finished the week at $958.80 per ounce on the NYMEX; gold futures gained $11.50 Friday, and silver, copper and platinum also advanced. As for oil, prices crested above $75 a barrel last week, with futures settling at $72.74 Friday in slight retreat from that 2009 peak.5

Low volume, languid week. With so many traders on vacation, the last full week of August was quiet on Wall Street. Make that quietly positive: the S&P 500 advanced 0.27% last week to 1,028.93, the NASDAQ gained 0.39% to reach 2,028.77, and the Dow gained 0.40% in five days to close at 9,544.20 Friday.6

% Change Y-T-D 1-Yr Avg 5-Yr Avg 10-Yr Avg
DJIA +8.75 -18.53 -1.28 -1.39
NASDAQ +28.64 -15.88 +1.79 -2.65
S&P 500 +13.91 -20.89 -1.42 -2.37
10YrTIPS Yd -23.14 +10.13 -1.08 -5.04

(Source: CNNMoney.com, ustreas.gov, bls.gov, 8/28/09)7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Name a sport in which neither the spectators nor the participants know the score or the winner until the match ends.

Contact my office or see next week’s Update for the answer.

Last week’s riddle answer: Lettuce.

These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and 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. The 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.

1 nytimes.com/2009/08/29/business/economy/29econ.html?ref=business [8/28/09]
2 washingtonpost.com/wp-dyn/content/article/2009/08/26/AR2009082601876.html?hpid=topnews [8/26/09]
3 marketwatch.com/story/durable-orders-jump-49-on-aircraft-bookings-2009-08-26-83100 [8/26/09]
4 bloomberg.com/apps/news?pid=20601068&sid=aLxYgIJgh9sI [8/28/09]
5 google.com/hostednews/ap/article/ALeqM5hLdQzzkk_vLW3OsMLzbo-eZnRKbAD9AC42LO0 [8/28/09]
6 cnbc.com/id/32594921 [8/28/09]
7 money.cnn.com/data/markets/dow/ [8/28/09]
7 money.cnn.com/data/markets/nasdaq/ [8/28/09]
7 money.cnn.com/data/markets/sandp/? [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F28%2F08&mode=add&symb=DJIA [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F04&mode=add&symb=DJIA [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F99&mode=add&symb=DJIA [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F28%2F08&mode=add&symb=COMP [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F04&mode=add&symb=COMP [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F99&mode=add&symb=COMP [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F28%2F08&mode=add&symb=SPX [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F04&mode=add&symb=SPX [8/28/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F27%2F99&mode=add&symb=SPX [8/28/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [8/28/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [8/28/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_1999.shtml [8/28/09]
9 bls.gov/news.release/history/cpi_08171999.txt [9/15/99]