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This Week's Market Review

It was a profit taking week on Wall Street as the markets pulled back after strong advances during the month of August. Although some believe the drop was due to rising unit labor costs, we have seen enough inflation data from the third quarter that it is still strongly believed the Fed will not raise rates at their next meeting on September 20th. In company specific news, Intel (INTC) reported that it plans to cut 10,500 jobs and further proof of a homebuilding slowdown came as Lennar Corp (LEN) issued a third quarter warning. We saw positive news in the further correction in oil prices. This bodes well for the long-term inflation outlook as well as the added consumer discretionary spending power. Going forward, things look positive from a fundamental standpoint and although we may see another rate hike from the Fed this year, it is not too early for longer-term investors to look past the top of the rate hike cycle in 2007.

The DOW closed the week down, falling 72.04 points to close at 11392.11 The S&P fell 0.9%, losing 12.09 points, ending the week at 1298.92. The NASDAQ lost 1.2%, shedding 27.37 points, ending the week at 2165.79.