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The market finished the last trading session of the week modestly higher. The Dow advanced 22 points after plunging 289 points yesterday. The Nasdaq, which was the best performer among the big three, gained 30 points. For the week, the Dow posted a loss of 130 points while the S&P 500 lost 3 points. Most economic news came better than expected. Durable goods orders for June unexpected rose 0.8% while economists were looking for a decline of 0.3%. Excluding volatile transportation orders, bookings rose 2%, the best this year following a drop of 0.5% in May. In addition, orders for non-defense capital goods excluding aircraft, which is a measure of future business investment, climbed 1.4%. Move on, we saw some good numbers on the housing front. Sales of new homes came at a 530K annualized pace in June, better than forecast of 505K. More important, the number of new houses for sale dropped by the most since 1963 to 426K units compared to 543K units a year ago, indicating that slowdowns in construction are starting to have an impact on the inventory level. The median sales price decreased 2% from a year ago to $230,900. Yesterday another report saw a 6.1% drop in price for existing homes. Finally, Michigan consumer sentiment index came at 61.2 while economists were looking for a reading of 56.4.
Basic materials and energies were among the best performers for the session. After being beaten down relentlessly since the end of last month, the commodity sector had huge overhanging volumes above the current price level. Unless something dramatically changed to bring commodity prices back to new highs, any rebound in the sector will be temporary. The CRB commodity index finished the session modestly lower and the index has dropped 9 out of the last 10 sessions. The US dollar moved modestly higher against most major currencies while treasures resumed its slump in the face of better than expected economic reports. The VIX index dropped fractionally and the market breath was slightly positive. The volume is on the light side.
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