The Markets

Despite a nice pop early in the week, discouraging earnings from a couple of computer bellwether companies and a key analyst downgrade of chipmakers raised concerns about the tech sector generally and took down the Nasdaq by week's end. (A boost in the dollar also didn't help.) The S&P couldn't quite hold on to the 1100 mark, but the Dow remained in positive territory for the third week in a row.

Market/Index	2008 Close	Prior Week	As of 11/20/09	Week Change	YTD Change
DJIA	8776.39	10270.47	10318.16	.46%	17.57%
NASDAQ	1577.03	2167.88	2146.04	-1.01%	36.08%
S&P 500	903.25	1093.48	1091.38	-.19%	20.83%
Russell 2000	499.45	586.28	584.68	-.27%	17.06%
Global Dow	1526.21	1950.46	1935.54	-.76%	26.82%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.43%	3.36%	-7 bps	112 bps

Last Week's Headlines

• October retail sales were higher than expected--up 1.4% from the previous month--but September's decline was worse than previously thought (-2.3% instead of -1.5%).
• Higher food and energy prices pushed wholesale inflation up 0.3% in October. However, so-called core inflation at the wholesale level saw its biggest decline in 3 years; it was down by 0.6%. Energy also was responsible for a 0.3% increase in inflation at the retail level in October. Cars contributed to the increase; prices for used cars and new cars were up 3.4% and 1.6% respectively. On an annual basis, consumer inflation is down 0.2%, though core inflation, which excludes energy and food, is up 1.2%.
• Industrial production continued to rise in October, though at a much slower pace than the previous three months. Cooler weather pushed up output at utility companies by 1.6%, which accounted for almost all of the 0.1% increase in overall industrial production. Factory output contracted by 0.1%.
• After four months of staying level, housing starts fell 10.6% in October--the biggest decline since January. That put new residential construction almost 31% below last year's level. Building permits fell 4% during the month.
• Six of the ten leading economic indicators measured by the Conference Board were up in October, resulting in a 0.3% increase in that index (its seventh consecutive gain). The positive factors were interest rate spreads, stock prices, jobless claims, hours worked in manufacturing, money supply, and new orders for consumer goods.
• The Mortgage Bankers' Association said a record 14.41% of home loans were either behind at least one payment or were in foreclosure during the third quarter--the highest level since the survey began in 1972. Of foreclosures begun in the third quarter, 33% were on prime fixed-rate loans. Florida, California, Arizona, and Nevada continued to have more than 40% of all foreclosures.
• Hoping to mute public outcries over its proposed employee bonuses, Goldman Sachs announced it will contribute $500 million to provide business education and capital for small businesses.

Eye on the Week Ahead

Shopping may be the key to a holiday-abbreviated trading week as investors devour reports on existing and new home sales, consumer spending, and the retailers' most important holiday of the year, Black Friday.

Key data releases: Home resales (11/23); Q3 GDP (revised estimate), home prices (11/24); durable goods orders, personal income/spending, new home sales (11/25).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

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