Saturday, July 26, 2008

Durable Goods Bump Helps Stocks

Of late, economic news has been more or less discouraging to investors, but the week ended with some upbeat data on durable goods orders, which increased by 0.8% when analysts were expecting a downturn of -0.3.

That bit of positive news was enough to boost the averages into a higher close at week's end.

Dow 11,370.69 +21.41; NASDAQ 2,310.53 +30.42; S&P 500 1,257.76 +5.22; NYSE Composite 8,395.58 +25.67

Volume on the exchanges was typically light for a mid-summer session and somewhat of a relief after Thursday's deep drubbing.

Advancing issues finished ahead of decliners, 3654-2561, though new lows retained their edge over new highs, 236-99.

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The price of crude oil continued its descent, dropping another $2.23, to $123.26. The metals rebounded slightly after days of losses. Gold was up $4.60, to $936.90; silver gained 8 cents to close at $17.38.

Corporate earnings were also generally pleasing, with no downward surprises or 3rd quarter warnings from companies reporting, but, despite the spate of good news, the markets were choppy and directionless.

Investors are still uneasy and uncertain. Housing, banking and credit continue to be the main sources of concern and those are simply not going to improve readily. Additionally, layoffs and unemployment are seen as rising over the next few months. A weak labor market may emerge as the greatest threat to economic expansion. These conditions will likely continue until at least the November elections.

NYSE Volume 1,287,772,000
NASDAQ Volume 2,016,542,000

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