Markets mixed on weak economic data

Dow fell on the opening but recovered back to break even. Dow is now up 10, advancers over decliners 3-2 & NAZ rose 6 bringing it back over 2K. Banks are having another good day, shooting for its 193 high.

S&P 500 FINANCIALS INDEX

Value 191.51

Change 2.68

% Change 1.4%

The high yield sectors were up or down only pennies, following the lead of the major averages. Oil was also flat. However the yield on the 10-year Treasury bond rose 4 basis points to 3.66% ahead of another bond auction today.

Alerian MLP Index --- 2 weeks




The big story was the negative economic news. Jul retail sales were disappointing & the number of new claims for unemployment benefits rose unexpectedly last week raising concerns about how quickly consumers will contribute to an economic recovery. Retail sales fell 0.1% in Jul versus an expected a gain of 0.7%. Autos, helped by the start of the Cash for Clunkers program, showed a 2.4% jump, the biggest in 6 months, but there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets & furniture stores all reported declines. This was the first setback following 2 months of modest sales gains. Excluding autos, sales fell 0.6%, worse than the forecasted 0.1% rise.

Unemployment claims increased to 558K, from 554K in the prior week (analysts expected new claims to drop to 545K). The number of people remaining on the rolls, fell to 6.2M from 6.34M in the previous week. The 4-week average of initial claims rose by 8½K to 565K, reversing 6 straight weeks of decline. The weak job market hurt sales last month.

Wal-Mart (WMT), Dow stock & Dividend Aristocrat, reported virtually flat Q2 income compared with last year which beat expectations & they raised the low end of its profit outlook as a series of cost-cutting moves draw frugal shoppers away from rivals. WMT was up 84¢.

•Retail Sales in U.S. Unexpectedly Fall on Concern Over Job Losses, Income

Wal-Mart --- 1 year

The Jul weakness in retail sales highlighted worries about the potential strength of the recovery from the recession as consumer spending accounts for about 70% of total economic activity. But Dow still has an optimistic tone, looking for about any gain today to reach another high for 2009.

Dow Jones Industrials --- 2 weeks