Inventory Trade Lifts Earnings

The majority of listed firms are reporting good results for Q2,but consumers remain cautious,holding back the final demand which ultimately creates jobs.As the inventory trade and government stimulus wind down,it will be harder to post such results in the second half,which doesn't bode well for the market,in the view of many.Gross Domestic Product rose a faint 2.4% for Q2,way down from Q1's revised 3.7%.
The market closed flat on the week,but rose around 7% for July-the best monthly gain in a year.Volume remained light,however,and the 10 year bond's yield was less than 3%,indicating an uncertainty underlying the good cheer on the surface.
There was little good cheer to greet new acquisition pitcher Roy Oswalt at Nationals Park as Washington creamed Philadelphia 8-1,ending the Phillies' eight-game winning streak.At the Greenbrier Classic PGA Tour event a few hours away in West Virginia,Jeff Overton topped the leaderboard,shooting a second round 62 for a -14.Boo Weekley was second at -10,while last week's Canadian Open champion Carl Petterson of Sweden was still in contention,having scored a second round 64 for a -5.
Stock futures looked optimistically to next week,with the S&P up 1.30,the Dow gaining 8.0,and the NASDAQ booking a 5.0 gain.Bond futures declined.

Industrials Power Rally

A number of industrial firms reported successful Q2s,spurring the market to a rally this week.United Technologies,Honeywell,Caterpillar and Ford all beat Wall Street estimates,reassuring investors that business is still possible in the post-Lehman world.Microsoft,Coca-Cola and UPS also beat the Street.
In baseball,Philadelphia was beating Colorado 5-0 before the 85th consecutive sellout crowd in Philly,and Baltimore brushed past Minnesota 3-2.An obscure American golfer,Brent Delahoussaye,28,led the Canadian Open in Otobicoke,Ontario,along with compatriot Steve Wheatcroft,at 9 under par.The top Canadian on the Order of Merit of the Canadian Tour,Adam Hadwin,22,shot a 66 for a -6.The PGA Tour moves to West Virginia next week for the Greenbrier Classic.Update:American Dean Wilson and South African Tim Clark surged to the top of the leaderboard with a 10 under par.
Strong storms shook the New York City area tonight,with tornado warnings blanketing the metro environs.Morris County,New Jersey reported downed trees and wires,and circulation was detected by radar,but no tornadoes were seen.
The S&P futures were continuing the rally this evening,up 12.90,while the Dow futures rose another 119.0 and the NASDAQ clocked a +21.0,with bond futures also gaining.
United Technologies(UTX),Honeywell(HON),Caterpillar(CAT),Ford(F),Microsoft(MSFT),Coca-Cola(KO),United Parcel Service(UPS)

Market Disappointed,Oosthuizen Pleased

The market recorded a weekly loss,disappointed by a string of poor data on consumers and manufacturing,as well as revenue misses by leading companies.Google,General Electric,Citigroup and Bank of America discouraged investors with their sales and outlooks.Confidence is low as we enter the heart of earnings season,with 12 Dow components and 122 S&P firms reporting next week.The Dow dropped 1.0 this week,while the NASDAQ fell 0.8 and the S&P slipped 1.2.The trading range is indeed keeping its grip on the faltering market.
Tiger Woods is still in the running at the Open Championship in St.Andrews,Scotland.He shot a 73 on Friday for a -4,tied for fifteenth.The field was led by Louis Oosthuizen(pronounced Westhizen),27,of South Africa,a protege of Ernie Els,who is ranked #54 in the world and 22nd on the European money list.Oosthuizen shot a 67 for a -12 on Friday.Fifty year-old Mark Calcavecchia also shot a 67 on Friday for a -7,putting the American in second place.
The prospect of all those earnings reports,as well as housing data,had the Dow futures falling off a cliff at -233.00 this evening,with the NASDAQ following suit at -47.25 along with the S&P at -27.30.Bond futures also retreated.BP investors were feeling relieved as the latest attempt to cap the oil spill looked very promising.
General Electric(GE),Citigroup(C),Bank of America(BAC),Google(GOOG)
Update:Louis Oosthuizen continued to lead by several strokes in the final round,with the U.K.'s Paul Casey in second,as of Sunday morning Eastern.Tiger Woods had dropped to thirty-first.

Correction Ends On Optimism

A wave of optimism lifted the market out of correction territory this week,fueled by bullish reports from Australia and Canada,as well as progress reported by retailers JC Penney,Macy's and others.Employment surged in Australia and Canada,while hot weather in the U.S. sent people into shopping malls,where they couldn't resist the bargains.This created hope that earnings season,which begins next week with Alcoa's report,would show stronger growth than had been feared.For the week,the Dow was up 5.3%,while the NASDAQ gained 5% and the S&P logged a 5.4% increase.
Golf fans are looking ahead to the British Open at St.Andrews' Old Course in Scotland,which begins next week.It is the third of the year's four Majors.St.Andrews is considered the home of modern golf and is a great favorite with the players.In baseball,the young Stephen Strasburg was pitching masterfully for the Washington Nationals tonight as they dominated San Francisco 8-1.He is showing he is no flash in the pan,justifying the high level of fan interest being generated by his talent.There's a real presence about him.Miami Heat basketball fans held a pep rally for the newly signed LeBron James and friends,broadcast live on ESPN.
The S&P futures were ascending 5.50 this evening,and bond futures rose as well.
JC Penney(JCP),Macy's(M)

Manufacturing Slows,Jobs Feeble

The manufacturing sector slowed worldwide recently,the latest data show.This was the one area of the economy that seemed a sure thing.The Institute for Supply Management charted a fall-off in activity,however,from 59.7 in May to 56.2 in June.It is still expanding if the number is above 50-just at a slower pace now.Factory orders fell 1.4% in another report,the largest drop since March of 2009.The question arises whether we are backing and filling or going over a cliff.We'll have to wait till at least next week to know,when earnings season gets underway.
The big report of the week,the unemployment figures from the Labor Department,were hardly reassuring.A loss of 125,000 jobs was recorded last month,while private industry created 83,000 positions.We need 150,000 a month to make a dent in unemployment.In consequence,the stock market clocked out with another weekly loss.The S&P fell 5.0,while the Dow stumbled 4.5 and the NASDAQ also slipped 5.0.The S&P futures registered a further decline of 7.5,and bond futures also gave up ground ahead of the Independence Day holiday.We are down 15% now from the market high of last April.The red returning to portfolios makes it feel like a lot more than 15%.
Boston Red Sox fans forgot about this as the Sox edged Baltimore 3-2 tonight behind 43-year old pitcher Tim Wakefield.In the AT&T National tournament at Aronimink in Newtown,Pennsylvania,Tiger Woods made the cut,shooting a mediocre 70,+3,and Justin Rose topped the leader board at the close of day two.