Wall Street enjoyed an unforeseen ray of sunshine in July as The Dow Industrial Average gained a healthy 692 points, opening at 9,744.02 on July 1st and closing at 10,465.94 on July 30th, a 6.61% jump. The Dow’s peak of the month occurred last Tuesday (July 27th), passing the 10,600 threshold to a 10,632-point climax, up over 845 points from the low of the May 6th “Flash Crash” and up over 4,000 points from the March 2009 slump.
The S&P 500 experienced a similar rally, starting the month off with a bang of over 6.4 billion in trading volume on July 1st, ending the day at 1,027.37 points, a drop from June levels but up 104 points from the previous year. After a steady and modest uptrend, the S&P closed out the month at 1,101.60, up approximately 6.5% from the start of July and a 43.41% pop from the low on March 9th, 2009.
Commodities saw some of the action throughout July as well, with a 13.5% surge in oil to a 3-month high and precious metal futures retain a strong outlook heading into August. Currencies saw more mixed results, as the Japanese Yen, Australian Dollar, Canadian Dollar, and Mexican Peso rose and the British Pound, Euro, and Yuan veered south. The euro has shot up over 10% against the greenback since sinking to a 4-year low two months ago. With the euro lingering around $1.32, talks about the currency’s destiny to achieving parity with the dollar in the near future have diminished. A palpable easing of the European debt crisis has helped as well.
The positive figures occurred in spite of sluggish economic activity. The lackluster activity, however, was not as dawdling as many experts had predicted for July.
As investors continue to lick their wounds, much of the financial world seems to expect further strength in coming months. The New York Times recently reported a surge of over 2,000 jobs added at New York securities firms in anticipation of recovery, and the market trudges a path of modest incline. Although plenty of talk about double-dip recession remains, it is hard not to look at the Dow’s performance in July without remembering the old adage about bull markets climbing walls of worry.
Despite a stubbornly-high unemployment rate, flat home prices, gloomy revenue reports from leading U.S. companies, and Alan Greenspan’s recent dubbing of the US economic condition as “quasi-recession,” investors seem to retain some surprising levels of confidence. The aggressive moves on the street could indicate a “worst-is-behind-us” mentality among the financial community. Indeed, August started off with an impressive 208.44-point jump in the Dow.
Below are some of July’s movers and shakers, along with the not-so-lucky:
Disclosure: "no positions"