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Re-cap of the US Stock Market Action for the week ending July 31, 2009

 

The DJIA added 8.6% in July, its best monthly gain since October 2002, as most companies topped analysts’ Q-2 profit estimates since records began in 1993. Other major indexes also ended higher in July for a fifth straight monthly advance.

On the week the DJIA rose 17.15, or 0.19% to close at 9,171.16, and the S&P500 index gained 0.73 pts, or 0.07pts, to close at 987.48, and the NAS dipped 5.80, or 0.29%, to 1,978.50.
 
The US Commerce Department said on Friday that the US gross domestic product (NYSEMKT:GDP) contracted at a less-than-projected 1 % annual rate after shrinking 6.4 % in the prior three months, a sign the worst recession since the Great Depression is winding down. Many Economists had expected a decline of 1.5%.

Consumer spending, which accounts for more than two-thirds of the economy, fell at a 1.2% pace, more than forecast, following a 0.6 %  increase in the prior quarter, which limited advances of major indexes.

Ford Motor Co., the only major US automaker to forgo federal aid, rallied 8.3% , after the House approved a measure to add US$2B to the cash for clunkers car-purchase incentive program.

The Walt Disney Co. slipped 4.2 %, after the world’s biggest media company reported third-quarter revenue trailed estimates. And JP Morgan Chase & Co. downgraded the shares to “underweight” from “neutral.” That has contributed to the overall recovery theme and boosted risk appetite.

Further adding to the positive risk tone was the surge in commodity prices, with oil prices rising nearly 3.0 percent.

In late Friday afternoon trading in New York, the ICE Futures US dollar index, which tracks its movements against a basket of six other major currencies, fell 1.3 % to 78.291 .DXY, after falling as low as 78.220, a fresh 2009 low. The index closed just above 78.300, the lowest since September 2008 At current prices, the dollar index was on track to post a 2.3 percent fall for July.

The Euro rose 1.3% on the day to $1.4253, its biggest one-day gain in more than a month. The Euro zone’s single currency was up 1.6 percent for July.

The US$ fell 0.9 % against the yen to 94.71 yen. The Euro rose 0.5% versus the Japanese currency to 135.03. Sterling jumped to a one-month high against vs. the US$ at US$1.6733.

Data showing business activity in the US Midwest in July increased more than expected also boosted demand for riskier assets, analysts said.

The National Association of Purchasing Management-Chicago business barometer rose to 43.4 from 39.9 in June. Economists polled by Reuters had expected it at 43.0.

Stocks to Watch Today

I am traveling this weekend, stock talk will return on August 4, 2009, Stay tuned…