Santa Anas Blast SoCal;McIlroy and Quiros Lead

The San Gabriel Valley was rocked by hurricane force Santa Ana winds this week in a rare event the likes of which are seen only once in 5-10 years.The tremendous gusts decimated the urban forests of Southern California as communities lost hundreds of treasured trees,losing power and even water in the process.Pasadena was particularly hard hit,with some 450 street trees being toppled by the winds.Homes were damaged in these lands along the San Gabriel Mountains,where gusts of up to 80 mph were recorded.
The fire risk was described as explosive by a weather service official.The Santa Anas are known for the catastrophic wildland fires they often contribute to in the region.
Rumors of European progress and positive manufacturing and employment trends protected the market this week.All major averages posted gains north of 7%.For the week,the S&P 500 rose 7.39.On the year,the S&P is still down 1.06,however.
The Race To Dubai,The European Tour,made its next to last stop at the Hong Kong Golf Club.After two rounds of the UBS Hong Kong Open,Alvaro Quiros of Spain and Northern Ireland's Rory McIlroy topped the leader board.Luke Donald of England led the series going into this weekend,followed by German Martin Kaymer and McIlroy in second and third place,respectively.
Next week will be back-loaded by an important Friday summit in Brussels on changes to the EU treaty for fiscal discipline.Other influential events will include the Institute for Supply Management's service sector report on Monday and a consumer sentiment reading also on Friday.The S&P futures were basically flat at -0.10 Friday evening,while bond index futures rose.

A Recovery In Name

Technically,the economy is recovering.Both the service and manufacturing sectors are growing,according to the Institute for Supply Management's authoritative surveys.Jobs are being created,and fewer jobs are being lost,the Labor Department's employment report shows.These trends are generally so weak,however,they are unable to help the mass of suffering Americans to any appreciable extent.It is really a stalemate,but a stalemate isn't enough to stop deterioration in quality of life for many,nor an underlying threat to the recovery itself in the form of more delinquent mortgages and lesser tax revenues.The stock market was up for the week by less than two points,and volume remains light because there is an appropriate current of suspicion regarding the economy.
Tiger Woods isn't a factor in the tournament he has owned for years,the Bridgestone Invitational at the Firestone Country Club in Akron,Ohio,with his four over par performance.South African Retief Goosen,a two time winner of the U.S. Open,led the field at -7,while Americans Phil Mickelson and Justin Leonard were close behind with a -6.World number three Lee Westwood of Great Britain withdrew from the tournament with an injured leg.In major league baseball,the Blue Jays slipped by the Tampa Bay Rays 2-1 in Toronto.
Stock futures were mixed this evening,with the Dow down 22.0,the NASDAQ up 1.50 and the S&P lower by 4.00,while bonds also fell.

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.

S&P In Correction's Shadow

The S&P remains in correction mode this weekend,being down 10.6% from its April high.For the week,the index fell 4.2,while the Dow stumbled 4.0 and the NASDAQ crumbled 5.0.Yes,the Eurozone debt crisis was a fundamental concern;but it wasn't just Europe.Unemployment claims here rose sharply and unexpectedly,up 471,000.Two important manufacturing reports,the Philly Fed and the Empire State,showed a decline in new orders,and the index of Leading Economic Indicators was down as well.
In sum,the recovery went on vacation this week,leaving investors behind to contemplate a return to serious worry.The idea of a double dip recession had been receding this year to almost invisibility,but has a renewed credence now.Cash is looking more attractive than it has in some time as we grope our way through a new maze of uncertainty.Indeed,it seems the path of wisdom until the fear index settles back at least somewhat.
The futures are a mute equation.Both the equity and bond futures are up,indicating confusion about what lies ahead.Baseball is simpler.Baltimore led Washington tonight in inter league play,while Virginia was topping Miami in college ball.