The Dow Jones Industrial Average advanced over 394 points, or 1.5%, to 26,797.46 this past week, while the S&P 500 rose 1.8% to 2,978.71, and the Nasdaq Composite climbed 1.8% to 8,103.07. Those gains followed last week’s 2.8% rise in the S&P 500 and marked the first two-week winning streak since July. The Dow Transports were ahead by nearly 1.75% and small and mid-cap stocks were able to join the party with gains in the 1.2% – 1.8% range. Once again, all market sectors were in the green led by the beaten down energy group, up 2.7%. Gold retreated $12.90, but still was able to settle above $1,500/oz.
Investors were enlightened by the fact that the U.S. and China finally set a date to resume trade talks. Otherwise, economic data was not that encouraging. August’s payrolls report came in light and would have been even worse if not for a big boost from census hiring. The Institute for Supply Management’s manufacturing index fell below 50, signaling a full-blown contraction in industrial activity and the first in three years. And consumer sentiment is beginning to wane. Such trends, along with choppiness in housing and further increases in our already large trade deficit with China, suggest that it will not always be smooth sailing ahead for the economy.
With the current economic and trade backdrop likely to drag on for a while longer, a good strategy would be to keep a healthy dose of quality stocks in one’s portfolio, with new positions being added during times of market stress.
Here is the answer to last week’s trivia question: Iconic department store chain Macy’s – founded in 1929 – was formerly a brand of what department store holding company? Federated Department Stores, Inc., Associated Dry Goods, The May Department Stores Co. or Mercantile Stores Co., Inc. Answer: Federated Department Stores, which changed its name to Macy’s in 2007.
Today’s Trivia Question: United Parcel Service, Inc. was founded 112 years ago in August of 1907. It became a public company in what year? 1922, 1948, 1971 or 1999.