Stocks fluctuated Friday after a mixed batch of readings on consumer spending contributed to a muddled picture of the economy. The major stock indexes moved in a narrow band, alternately rising and falling in very light trading. Many traders were away on vacation, and those who were working had little reason to make any major moves because of economic data that remains confusing.

The Commerce Department said that retail sales rose 0.4 percent in July. That was an improvement after two months of sales declines. But the number was just below economists’ forecast of a gain of 0.5 percent. The report did show strength in auto sales, but it also showed that consumers are shying away from other purchases. Some better news came from the University of Michigan/Reuters survey of consumer sentiment for the first part of August, which showed consumers are slightly more optimistic. An index based on the survey came in at 69.6, slightly above analysts’ estimates and up from July’s 67.8.

Earlier Friday, retailer J.C. Penney Co. lowered its earnings forecast for the year, citing expectations that consumer spending will be slow. J.C. Penney joined competitor Kohl’s Corp., which lowered its earnings outlook on Thursday.

These latest reports fell in line with a long string of conflicting data that has left investors unsure about where the economy is headed. Consumer spending has remained weak along with the labor market. And there are no signs that employers are ready to start hiring at a pace to help lift the economy. On Thursday, the Labor Department said the number of people filing for unemployment benefits for the first time rose last week. Although J.C. Penney and Kohl’s had disappointments for investors, second-quarter earnings overall have been strong and company executives are optimistic. The split between economic and earnings numbers has added to investors’ murky view of the economy.

That uncertainty has led to heavy selling this week. The Dow Jones industrial average has lost 380 points over the past three days. But the big drop may also have lured some buyers back into the market Friday. “Maybe it’s getting ready to be bought again,” Philip S. Dow, director of equity strategy at RBC Wealth Management in Minneapolis, said of the market. He noted that the market‘s recent declines have made stocks more attractive. Still, that doesn’t mean analysts are looking for the market to rally. “We’re in a fragile market,” said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn. He noted that the market‘s decline is feeding the lack of confidence among consumers and investors. That inevitably has an impact on the economy.

The Dow Jones industrial average was up 22.29, or 0.2 percent, at 10,342.32. The Standard & Poor’s 500 index rose 0.43, or 0.04 percent, to 1,084.04. The Nasdaq composite index fell 4.28, or 0.2 percent, to 2,185.99. Rising stocks were ahead of losers by 4 to 3 on the New York Stock Exchange, where volume came to a light 445 million shares.

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July ended with the same uncertainty it brought in 2010, and I think mist are happy to move into August trading.  Markets were unusually slow and volume posthumously light as portfolio managers too the laptops to the beach or the back deck of the house and prepped for a summer BBQ. 

(AP) — News that economic growth slowed during the spring gave the stock market a fitting end to a choppy July — yet another back-and-forth day. The Dow Jones industrial average, down almost 120 points in the first minutes of trading, recovered and seesawed throughout the session. The Dow was up 17 in late afternoon. The other major indexes also rose modestly. Traders opted for the safety of Treasury bonds, and that sent interest rates lower. But stocks were on track for their strongest month in a year. The Dow was up 7.1 percent going into Friday’s trading. The Commerce Department said the gross domestic product, the broadest measure of the economy, grew at an annual pace of 2.4 percent from April to June. That’s less than the 2.5 percent economists polled by Thomson Reuters had forecast. At first the report confirmed investors’ belief that the recovery is weakening as unemployment remains high and government stimulus programs end. Consumers cut back on their spending because of job worries and companies spent less to rebuild inventories. But analysts said that as investors read deeper into the report, it didn’t look as bad as they initially thought. They found some good news in consumers’ savings rate. “The consumer actually decided to save more,” Jason Pride, director of investment strategy at Glenmeade, an investment management company. “Consumers have done more to repair their balance sheets than thought.” Pride said that means that those extra savings will eventually be spent, giving the economy a lift. Consumer spending accounts for the bulk of economic activity. Business spending on equipment and software jumped in the second quarter by the biggest amount in 13 years. That was encouraging, analysts said, because it means companies are eventually going to start adding jobs. “Companies are spending and eventually it will turn into employment,” said Ron Weiner, president and CEO at RDM Financial Group. It wasn’t surprising that stocks gave up their gains and turned lower. Trading has been erratic as weak economic numbers have conflicted with companies’ generally good second-quarter earnings and forecasts for the rest of the year. Investors have been quick to cash in their gains because they don’t have a sense of where the market is headed. In afternoon trading, the Dow Jones industrial average rose 17.48, or 0.2 percent, to 10,484.64. The Standard & Poor’s 500 index rose 3.34, or 0.3 percent, to 1,104.87, while the Nasdaq composite index rose 9.09, or 0.4 percent, to 2,260.78. Rising stocks outpaced losers by about 2 to 1 on the New York Stock Exchange where volume came to 745 million shares. Volume was extremely light even for a summer day. That continued a trend that has been seen for much of July. Analysts say many investors, uncertain about the where the market is heading, are staying on the sidelines or moving money into safer alternatives. That strategy sent Treasurys higher Friday. The yield on the 10-year Treasury note, which moves opposite its prices, fell to 2.91 percent from 2.99 percent. Its yield is often used as a benchmark for interest rates on mortgages and other consumer loans. A yield below 3 percent suggests investors are worried about long-term growth and don’t fear inflation will be a problem anytime soon. Inflation is a threat to the long-term value of bonds. Investors got some mildly good news from two other economic reports. The University of Michigan/Reuters consumer sentiment index for July rose slightly more than expected to 67.8 from a preliminary reading of 66.5. Economists expected it to rise to 67. And the Chicago Purchasing Managers Index, which measures manufacturing activity in the Midwest, rose unexpectedly to 62.3 this month from 59.1 in June. Economists were expecting a drop to 56.5. The report is seen as an indicator of how the Institute for Supply Management’s nationwide index is likely to come in when it’s released on Monday. Traders were also being cautious because they’re waiting for a series of key reports next week that will give a first look at how the economy is doing in the current quarter. The Institute for Supply Management releases its reports on the manufacturing and services sectors during July and the Labor Department issues its report on employment for this month. Economists predict the two ISM reports will show manufacturing and the services industry expanded in July but at a slower pace than in June. Meanwhile, the unemployment rate likely inched higher to 9.6 percent in July from 9.5 percent in June as the government laid off more temporary census workers. Private employers likely added 90,000 jobs during the month, slightly better than in June. Overseas markets mostly fell Friday after reports that Spain’s credit rating is likely to be cut by Moody’s Investors Service. The potential downgrade comes as the country’s unemployment rate jumped to a 13-year high of 20.09 percent and the government continues to grapple with rising debt problems. Spain’s IBEX 35 fell 1.2 percent. Britain’s FTSE 100 fell 1.1 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 fell 0.2 percent. Japan’s Nikkei stock average fell 1.6 percent.

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Summer Friday and GDP is slighly worse than expected and the economy grew slower, thats not really a shocker, as we digst earnings.  Lets face it Q3 can be a bore and all we really wait for is the Football Season and hope to avoid a market sell off in October.  On this Friday the best thing to do is head to weekend thinking and avoid closing on the lows for the day.

(AP) — Stocks fell and interest rates rose in the Treasury market Friday after the government said the economy grew at a slower pace than expected during the second quarter. The Commerce Department said the gross domestic product, the broadest measure of the economy, grew at an annual pace of 2.4 percent from April to June. That’s less than the 2.5 percent economists polled by Thomson Reuters had forecast.

The Dow Jones industrial average tumbled 106 points in early morning trading.

The report confirmed investors’ belief that the recovery is weakening as unemployment remains high and government stimulus programs end. Consumers cut back on their spending because of job worries and companies spent less to rebuild inventories.

The figure was especially discouraging after the government revised first-quarter growth to a pace of 3.7 percent from 2.7 percent.

The Dow Jones industrial average entered the last day of July up 7.1 percent for the month. The market‘s big gains have come on strong corporate earnings and profit forecasts that conflict with economic reports that point to a slowdown.

In the past few days, however, investors have been more focused on economic reports. Disappointing numbers on housing and unemployment and cautious words from the Federal Reserve have sent stocks lower.

In early morning trading, the Dow Jones industrial average fell 105.96, or 1 percent, to 10,361.20. The Standard & Poor’s 500 index dropped 11.88, or 1.1 percent, to 1,089.65, while the Nasdaq composite index fell 28.50, or 1.3 percent, to 2,223.19.

The disappointing GDP report sent investors into the safety of the Treasury market, which drove interest rates lower. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.93 percent from 2.99 percent late Thursday. Its yield is used to set rates on mortgages and other consumer loans.

European markets fell after reports that Spain’s credit rating is likely to be cut by Moody’s Investors Service. The potential downgrade comes as the country’s unemployment rate jumped to a 13-year high of 20.09 percent and the government continues to grapple with rising debt problems.

Losses also accelerated in Europe after the weak GDP report.

Spain’s IBEX 35 fell 2 percent. Britain’s FTSE 100 fell 0.8 percent, Germany’s DAX index dropped 0.8 percent, and France’s CAC-40 fell 0.8 percent. Japan’s Nikkei stock average fell 1.6 percent.

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- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source

This morning the second quarter Gross Domestic Product(GDP) results were released by the Commerce Department. The second quarter Gross Domestic Product reported was 2.4%. This is sharply lower from the revised first quarter number of 3.7%. Economists had expected the second quarter number to be 2.5%. Therefore, today’s number was not a big surprise. What does this all mean for the market?

Well, today the market is starting out under pressure with the SPDR S&P 500 ETF (NYSE:SPY) trading lower by 1.06 to $109.20. Most commodity stocks are under pressure this morning and this is a sign of deflation. Leading commodity stocks such as Cliffs Natural Resources Inc (NYSE:CLF), and Southern Copper Corp (NYSE:SCCO) are trading lower and remain under pressure. Remember when the U.S. Dollar Index is trading higher on the trading session this will often push the commodity stocks lower. Therefore, always keep a dollar chart open as most professional traders will key off this chart. Remember when the dollar is higher the stock market indexes will deflate. Should the dollar decline or sell off the market will inflate higher.

Since the July lows the markets have surged higher climbing about 10.0 percent from that level. However, since July 16th, the major indexes have been very choppy and volatile. This type of volatile action could be expected going forward. Please remember to keep an eye on the U.S. Dollar Index as that chart will generally give traders a good indication of where the stock indexes are trading. This morning the U.S. Dollar Index is trading higher by 0.15 cents to $81.79 and the market is obviously trading lower.

- About the Author: Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets. Article Source