The Standard & Poor’s 500 (S&P 500) was up about 1% this past week, but that good news was lost somewhere between Rick Perry’s “brain cramping” when he couldn’t remember the third government agency he would eliminate and the consternation surrounding the resignation of Italy’s Prime Minister, Silvio Berlusconi. Clearly there was a lot to talk about last week and when the closing bell rang on Friday, nine of the ten market sectors were positive for the week (the one negative sector was Financials which was down -0.4%).
For the week, the Dow Jones Industrial Average (DJIA) was up 1.43% to finish at 12,154, the S&P 500 gained 1.01% to finish at 1,264, the Nasdaq Composite Index was essentially flat finishing at 2,679 and the Russell 2000 Index was basically unchanged ending at 745.
Key economic data for the week included the Labor Department reporting that nearly 3.4 million jobs were posted in September, representing more advertised jobs than at any point in the past three years, clearly a positive sign that job growth will continue. Also reported was that jobless claims had fallen by 10,000 to 390,000 for the week–the lowest in seven months. Finally, the U.S. trade deficit shrank by 4% in September to $43.1 billion–the lowest this year.
As the third quarter results finish up this week, there are a number of retailers due to report earnings and expectations are high for a solid holiday season. The S&P 500 remains on track for a 6% upside surprise in earnings and 2% upside in revenues. Economic indicators such as rail and port traffic, in combination with the performance of transportation stocks, suggest that retailers have the inventory to support the holiday sales season.
With respect to the evolving situation in Europe, we are optimistic that the new leadership in Greece and Italy will bring more confidence to the global markets and put the eurozone back on track toward containing its debt crisis.
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**Standard Compliance Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values.