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This Week's Market Review

The third quarter wrapped up on a positive note with the DOW closing near an all time high on Friday. We now look forward to earnings season where forecasts for the S&P 500 call for a 14% gain despite signs that economic growth is slowing. Over the past few weeks the number of earnings warnings has been very low suggesting that Wall Street estimates are not too high. Economic data for the past week suggested that the economy is in for a soft landing. We saw August exisiting home sales drop by 0.5% while new home sales rose 4.1%. Durable goods came in weaker than expected as they fell 0.5%, however, the September PMI manufacturing survey rose to 62.1 from 57.1 in August. Inflation news was neutral as the August core PCE deflator was up 0.2%, reflecting a steady trend that should keep the Fed from raising rates further. Second quarter real GDP was revised downward to a 2.6% annual rate from 2.9%. Oil prices rose slightly to close near $63 per barrel while the yield on the 10-year note remained near steady at 4.63%. Going forward, the market has a few concerns such as the housing sector, a fear of broad economic weakness, and a continued concern with inflation. The market however, continues to shrug off concerns as it climbs the wall of worry.

The DOW closed the week up, climbing 170.97 points to close at 11679.07. The S&P rose 1.6%, adding 21.07 points, ending the week at 1335.85. The NASDAQ jumped 1.8%, rising 39.50 points, ending the week at 2258.43.