Weekly Recap - Week ending 31-Jul-09 YAHOO [BRIEFING.COM]: U.S. equity markets finished with modest gains this week, as the major indices all hit fresh highs for the year on Thursday before pulling back.  The S&P 500 rose 0.8%.

Entering the week, the S&P 500 had gained over 11% in a two-week span, and calls seemed to be coming from all over the marketplace for profit taking.  But the index stayed in last Friday's trading range through the first three sessions of this week.  Every morning shorts would attempt to lean on the market, but buyers stepped in each afternoon to support it.

Then on Thursday, the shorts seemed to abandon the effort, allowing the buyers free rein.  The result was the major indices gapped higher at the open, despite a lack of significant news to spark such a move, though they did close on a sour note. 

Of course, the gains this week did not come close to matching those of the prior two weeks.  The key catalyst then, cost-cutting earnings surprises, continued, but this week's earnings calendar lacked big names that can drive the market.  That's not to say there weren't important reports -- industries such as Oil Producers/Refiners, Health Insurers and Casinos all released results, along with a number of major foreign companies -- but with fewer bellwether firms reporting, the market-moving element of the reports weren't there.

Instead, the Financial sector led the way this week (+4.4%). Overall, seven of the ten sectors that make up the S&P 500 advanced, IT ended flat on the week, while Energy (-1.6%) and Utilities (-2.0%) lost ground.

Economic data stood out on this week's calendar, but the mixed results had little effect on the equity markets.  Following a disappointing Consumer Confidence figure for July (46.6 vs. 49.0 consensus) and mixed Durable Goods Orders data for June, the all-important Advanced reading for second quarter GDP was released this morning.  Despite the headline figure coming in at a better-than-expected -1.0% (consensus -1.5%), a poor Personal Consumption figure (-1.2% vs. -0.5% consensus) and downward revisions in the first quarter disappointed investors.

Nevertheless, the equity markets shrugged off the data, making modest gains in the first 15 minutes of trade before once again settling into a range.

There was some interesting housing data from earlier in the week worth mentioning.  New Home Sales came in at a better-than-expected 384,000 in June (consensus 352,000), while the S&P/Case-Shiller Home Price Index showed a less bad decline of 17.1% in May (consensus -17.9%).  Including last week's reading on Existing Home Sales, all three have improved since hitting their worst levels in January.  However, rising unemployment remains an influential retardant in the recovery process for the housing market, so this may simply be a stabilization at depressed levels.

We'd be remiss not to mention the large amount of supply that was auctioned off in the Treasury markets this week.  The most influential included $42 bln of 2-year Notes on Tuesday, $39 bln of 5-year Notes on Wednesday and $28 bln of 7-year Notes on Thursday.  The results did affect the equity markets (at 13:00ET each day), as the major indices briefly spiked higher on Tuesday and Thursday, and spiked lower on Wednesday.

Looking ahead to next week, we'd expect the calls for profit taking to resume, especially as second quarter earnings season winds down, but there's just as good a chance that the equity markets just keep going.  There will be even fewer bellwether names reporting to drive the market, but there will be some key pieces of economic data, culminating with Nonfarm Payrolls and the Unemployment Rate on Friday, August 7.

Index	Started Week	Ended Week	Change	% Change	YTD %
DJIA	9093.24	9171.61	78.37	0.9	4.5
Nasdaq	1965.96	1978.50	12.54	0.6	25.5
S&P 500	979.26	987.48	8.22	0.8	9.3
Russell 2000	548.46	556.71	8.25	1.5	11.5