Jill Schlesinger: Monday Market Note

The Wall Street sign is juxtaposed against the sculpture on the facade of the New York Stock Exchange, Friday Oct. 3, 2008. Stocks surged while credit markets remained strained Friday ahead of an expected House vote on the government's $700 billion financial rescue plan and after Wells Fargo Co. agreed to buy Wachovia Corp. in a $15.1 billion deal. (AP Photo/Richard Drew) AP Photo/Richard Drew

AP Photo/Richard Drew
The dour mood on Wall Street that started in April showed no signs of letting up last week. In essence, Mr. Market is telling us that he's not sure whether we're headed towards double dip or that this is simply a temporary lull in the recovery process.

The data were consistent with this struggle: the housing sector continues to be weak, consumers are saving more and spending less, and companies are seeing healthy profit margins, low borrowing costs and strong balance sheets.

Instead of increasing payrolls, some companies are using the extra cash for buying sprees (BHP Billiton, Intel, First Niagara Financial), reviving hopes for the beaten-down mergers and acquisition market.

In the end, the bears won out last week, though most traders admitted, "It could've been worse."

DJIA: 10,213, down 0.9% on week, down 2% YTD (down 4.1% in 2 weeks)

S&P 500: 1071, down 0.7% on week, down 3.9% YTD

NASDAQ: 2179, up 0.3% on week, down 3.9% YTD

September Crude Oil: $73.46, down 2.6% on week

August Gold: $1227.20, up 1% on week (up 3.85% over last three weeks)

Total bank failures for 2010: 118 (8 new bank failures over weekend)

Yesterday, a new round of credit and gift card rules went into effect — see changes here and here.

FACTOIDS OF THE WEEK:

1. PERSPECTIVE WATCH: US stocks are still 58% above the crisis lows and 12% off their 2010 peaks.

2. As we prepare to see US GDP drop below 2% when the data is released on Friday, here's a stunner: Chinese nominal (before inflation) GDP has averaged 13-15% for the last 15 years!

3. Fidelity reported that 401(k) hardship withdrawals reached a 10-year high in Q2.

IN THE WEEK AHEAD:

As earnings season winds down, there will be a few more retailers checking in with results, including Barnes & Noble, J. Crew Group and Tiffany. The economic focus will be on Friday's revision to the first estimate of Q2 GDP — analysts believe that the number will be revised down to 1.4% growth from 2.4%.

July existing and new home sales will keep real estate-watchers busy — be on the lookout for more disappointing action in the housing market now that the first time home buyer credit has expired.

Tues 8/24: 10:00 Existing Home Sales

Weds 8/25: 8:30 Durable Goods

10:00 New Home Sales

Thurs 8/26: 8:30 Weekly Claims

11:00 Treasury Auction of 3 mo, 6 mo and 7 yr

Fri 8/27: 8:30 am Q2 GDP

8:30 Corporate Profits

9:55 Consumer Sentiment

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    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

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