Weekly Update

Market Week: July 27, 2009

The Markets Ongoing cost-cutting helped produce earnings reports that, while not great across the board, were generally better than expected. That made the markets very, very happy and contributed to a second straight week of gains. All three indexes rose above their recent June highs, giving the Dow its most encouraging two-week streak since March 2000 and bringing it above 9000 once again--roughly where it was when the year began. After twelve straight days of gains, the Nasdaq hit a level it hadn't seen since last November before wilting a bit in the wake of disappointing results from Microsoft and Amazon. The S&P 500 finally broke through the closely watched 950 mark and also reached its highest level since November. The small-cap Russell 2000 has risen 14% in the past two weeks. Market/Index 2008 Close Prior Week As of 7/24/09 Week Change YTD Change DJIA 8776.39 8743.94 9093.24 +3.99% +3.61% NASDAQ 1577.03 1886.61 1965.96 +4.21% +24.66% S&P 500 903.25 940.38 979.26 +4.13% +8.42% Russell 2000 499.45 519.22 548.46 +5.63% +9.81% Global Dow 1526.21 1664.23 1747.64 5.01% +14.51% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 2.24% 3.65% 3.67% 2 bps +143 bps Last Week's Headlines The Conference Board's index of leading economic indicators rose in June for the third straight month, by 0.6%. Seven of the ten indicators were up. Sales of existing homes rose in June--traditionally one of the busiest months for home sales--for the third straight month, increasing by 3.6% from May. However, they are still down slightly from last year. Federal Reserve Chairman Ben Bernanke continued to reassure Congress that the Fed's target interest rate is likely to remain practically nonexistent for quite some time. The Fed also rolled out a proposal for beefing up consumer protection and disclosure regulations dealing with mortgages and home-equity loans. The minimum wage rose to $7.25 an hour in all states where it wasn't already at that level. That's doubtless a relief to many workers and potentially a boon to the economy, but also raises concerns that it could prompt further cost (and job) cutting by employers. The University of Michigan consumer sentiment index joined last month's Conference Board report in finding that consumers are less optimistic about the economy than they were a month earlier (though they're still feeling better than they were last November). Overseas, the U.K. economy saw its largest annual decline since recordkeeping began, dropping 5.6% in the second quarter. However, German manufacturing exports are beginning to pick up a bit, largely on buying from Asian countries flush with their own governmental stimulus packages. Eye on the Week Ahead The initial assessment of economic growth in the second quarter will make for interesting comparisons to the continuing flow of second-quarter corporate earnings reports. Data on the housing market should suggest how the traditional summer buying season is going this year. The Commodities Futures Trading Commission will begin discussing how to rein in speculation in the energy markets. Key data releases: New home sales (7/27); consumer confidence (7/28); durable goods orders, oil inventories (7/29); second quarter GDP (7/31). Data source: Includes data provided by Forefield, Inc. & Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.