Hot Wall Street Caps Best July in 20 Years

Strong Earnings Reports Fuel Month-Long Rally; Dow Rises as GDP Shrinks at Slower Pace

(CBS/AP)  Traders are using good news about the economy to give the stock market its best July in 20 years.

Stocks have tacked on moderate gains after the government said the economy shrank at a slower pace than expected in the April-June quarter.

Investors have been placing big bets this month that the longest recession since World War II is finally receding. The Dow has finished the month with an 8.4 percent gain - its strongest July since 1989, when it gained 9 percent. It's the blue chips' best performance of any month since October 2002.

According to preliminary calculations, the Dow is up 17 to 9,171. The Standard & Poor's 500 index is up just shy of a point to 987 and the Nasdaq is down 5 to 2,978.

The government said the nation's gross domestic product, a measure of the economy's total output, slowed at a rate of 1 percent during the quarter. That was better than the 1.5 percent drop expected by analysts.

The report is the strongest sign yet that the recession is winding down. However, the Commerce Department revised the first-quarter GDP figure much lower, saying economic activity tumbled 6.4 percent. That is the worst quarterly reading in nearly 30 years.

The report also found that consumers cut their spending in the second quarter, a troubling sign as consumer spending accounts for more than two-thirds of all U.S. economic activity.

"Investors have been trying to trade on any bit of good news, but it's not good," Steven Stahler, president of the Stahler Group in Baton Rouge, La. said of the report.

But there has been other good news in July. Stocks are up 13 percent since July 13 when investors bet correctly that Goldman Sachs Group Inc. would report enormous earnings. Since then, other profit reports have brought hope that the recession's end may be nearing. AT&T Inc., chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. all posted results that outran expectations.

Three out of four companies in the S&P 500 index that reported second-quarter results so far have topped analysts' expectations, according to Thomson Reuters. About 300 of the 500 companies have reported.

The GDP report has given investors pause after they extended a three-week rally on Thursday after welcoming a batch of strong earnings reports. Thursday's gains pushed all the major indexes to their highest closes since last fall.

But Thursday's earnings reports showed some companies are still struggling amid the recession, though the problems aren't as deep as investors were expecting heading into earnings season. The market was also boosted by a surprise drop in the number of people continuing to seek unemployment benefits.

[speakinup22]

Once again CBS has tried to make things sound rosie for barry, when in fact the CCI is STILL in the toilet.

When we come out of this economic funk, it WILL NOT happen overnight. And, No matter how much you add to the national debt, it is NOT going to help except in the short run. Get a clue.

[debinok1]

It would appear that the "PATCHES" are holding and the bubble might hold air. Unemployment is the only patch that seems weak. If unemployment continues to rise as it has been, then the bubble is only as strong as its weakest patch. This is not over by a long shot.

[grabandgo]

So Wall street gets a bonus from hardworking American's who will see nothing except taxes over 50% when obama is done "helping" our economy.

[Skifun2]

Can you imagine what Republicans would say after one of their candidates was elected in the worst economic recession since the depression or even the last recession period, with a around happeinging in less than 200 days? They would be singing their praise. Rush would be telling us how great the conservative are...Well some credit is due to the present administration. Now I am cautious on the earning reportings that are coming out as I am an executive and know how corporations use cost the economic state of fairs to right size without consideration at all for employees or the public.

[snake28281]

LOOK FOR INFLATION TO RISE OUT OF CONTROL-DOUBLE DIGITS-BY THE END OF THE OBAMA TERM AND THEN WE WILL SEE WHAT PEOPLE HAVE TO SAY

[aldon62]

Dude, stop with the caps, you're boring!

[snake28281]

$150 PER MONTH INCREASE IN ELECTRIC BILL POSSIBLE NEXT YEAR WITH NEW ENERGY BILL PUSHED THRU BY PELOSI-PAY FOR THE WINDMILLS BABY<NOT OIL DRILLING NOR COAL-HOW IS THAT GONNA GO OVER WITH PEOPLE STRUGGLING LIKE ME A 30% PAYCUT SINCE SEPTEMBER AND THOSE OUT OF WORK?

[snake28281]

NEWT GINGRICH FOR PRESIDENT!

[Benton09]

Seig Heil!

[bradkt1]

The first thing that had to happen for the economy to improve was to stop the hemmoraging and downward spiral. That appears to have happened. The second thing is for investor confidence to return. That appears to be on the verge of happening. Both home sales and the stock market are inching back up. It's not a clear trend yet, but it is a beginning...and is most welcome news to everyone except for those who want our President and country to fail in order to assist their selfish return to political power.

[snake28281]

IF DEMS HAVE THEIR WAY WE WILL HAVE GUN CONTROL TOO;SORRY-BUT CROOKS ARE GONNA GET THE WEAPONS THEY NEED SO WHY CANT I-IT GIVES CROOKS SOMETHING TO THINK ABOUT-EH-WHEN TAXES GET RAISED IN THE FUTURE-WHICH THEY WILLSINCE FED DEFICIT TO QUADRUPLE AT THIS RATE IN ABOUT 12 YRS-YOU WILL SEE ALL THE RICH IN WALLSTREET PULL THEIR MONEY OUT AND THE DOW WILL TANK;THE DOW MAY ALSO TANK IF NTL HEALTHCARE GOES THRU AND THIS WILL PUT MANY SMALL BUSINESS OWNERS UNDER ADDING TO EVEN FURTHER UNEMPLOYMENT;STAND BY!

[snake28281]

TOO MANY PEOPLE VOTED AND KNEW NOTHING OF THE ISSUES THEY WERE VOTING FOR-I VOTED ON THE ISSUES,NOT ON WHAT COLOR/GENDER SOMEONE WAS-SHLDNT VOTE AT ALL UNLESS YOU ARE VOTING ON THE ISSUES;WE CAN CHANGE THIS COUNTRY FOR THE BETTER IN 2010 BY GETTING CONGRESS A MAJORITY GOP;TEXAS AND THE REDBELT STATES HAVE IT RIGHT

[retiredgustav]

Texas is #1 in all of the wrong things thanks to the consevatives. We have the highest home owners insurance rates in the country along with the highest electric rates thanks to Bush and his electric de-reg bil, the lowest paid teachers and the highest drop out rate, and the conservatives think this is great. Texas will be BLUE in 2010!

[snake28281]

DEMS/OBAMA PULLING WOOL OVER YOUR EYES-CANT WAIT FOR YOU TO HAVE TO LIVE WITH IT AND SEE THE SHOCK;MUCH HIGHER TAXES ON WAY-HIGH ENERGY TAX/ECONOMY NOT AT BOTTOM OF BARREL;NTL HEALTHCARE NO GOOD_ASK DRS?HOSPITALS/FOLKS FROM CANADA GOING TO BUFFALO AND THEY WILL TELL YOU WHY-BIGGER GOVT NO GOOD-TELL ME 1 INSTANCE SOMETHING RUN BY GOVT RUNS SMOOTHLY-MORE SOCIAL PROGRAMS-WHY?-MAKE EM PICK UP TRASH OR DO SOMETHING CONSTRUCTIVE-I WORK 80 HRS/WK THE PAST 30 YRS AND HAVE HIGH MED BILLS AND HEAT BILL IN WINTER_WRITTEN OFF OR FREE TO THOSE ON WELFARE-NOT RIGHT!-LOOK AT ALL THE SCREWED UP STATES/HIGH TAXES-CALI,ILLINOIS,CT<MA<NEW YORK,NJ-ALL LIBERAL STATES-DOESNT THAT TELL YOU SOMETHING? OBAMA_ILLINOIS-SCREWED UP BIGTIME IN THE RED;BUSH WASNT THE GREATEST, BUT HE AND CHENEY KEPT US OUT OF ANOTHER 9-11

[Solarrays247]

If you actually want people to read your posts, do away with the caps. Otherwise, I refuse.

[HGOODGUY]

YOU ARE A BABBLING DELUSIONAL!!!!

[snake28281]

AS FAR AS NTL HEALTHCARE TOO_WHY THE RUSH_GONNA GET SCREWED UP UNLESS SMALL BITES ARE TAKEN 1st;LOOK FOR THE SMALL BUSINESSES TO GET KILLED IF IT GOES THRU_MAINLY THOSE WITH SAY 50 EMPLOYEES OR LESS THEN THE DOW AND UNEMPLOYMENT WILL RISE AGAIN-DONT SAY YOU NEVER HEARD IT

[robinspp]

Bush destroyed the US economy. Obama is fixing it. He is too good.

[TheStolenGiraffe]

for those that argue that the economy isn't improving and pointing to the unemployment numbers as proof...realize that the unemployment rate is a lagging economic indicator, which means it's likely to improve/slow down in loss long after the economy itself recovers/recedes in its downward pace.

instead, you should argue whether or not an economic recovery will be sustainable given the lack of new regulation and prosecution of executives we've seen so far.

[kennergirl]

Sure we've moved up... instead of under the bridge we're now in the gutter.

[chonder2]

Just like the the_Majesry-Majestary-Majesty-Monastary- says all the GOOD news was goimg to happen anyway! All the BAD news is Obama's fault!

[ToolMangler1]

Absoposislutely. Blame it on the new guy....

[robh84]

We are blaming the wrong man here people. This whole mess is the result of almost 30 years of Reagonomics. Trickle down economics was a great idea in theory. The problem was Reagan was too naive and didn't think that corporate America would search for loopholes and then screw over the American worker for the sake of their greed.

Giving tax incentives to companies in order to incourage growth is a great idea. But greed took over and these companies started finding loopholes which would allow them to send manufactoring jobs overseas. They would in turn hire more administrative positions here in the states in order to meet the guidelines for the tax breaks. Once this was done, the $$$$$ started rolling in, because manufactoring costs were cut by up to 70%.

But there was a problem. All this was started by greed. And these execs needed more, so they borrowed, and borrowed, and borrowed, until there was no one left to borrow from but the Chinese. Who by the way profited more than anyone due to their currency manipulation. They had the American manufactoring jobs. Which isn't considered importing or trade because the parent companies are American owned. They then manipulated their currency to the ratio of about 13:1, And the next thing you know. We owe the Chinese QUADRILLIONS of $$$, all because of corporate greed. Made possible by the Reagan, Bush I, and Clinton administrations. Bush II was too busy fighting a war for profit to hitch up to that gravy train. So wise up America, and do some research bloggers. You'll see whats really happening in America. Obama is small potatoes compared to whats really been going on.

[ToolMangler1]

Do not confuse repugs by showing them the truth or the facts, They can't handle them.
They live in a different world than we do, (Chemically induced)

[Solarrays247]

Excellent post, robh84.

We were warned beginning in 1983(if I remember correctly), that what we are actually experiencing today would eventually happen. Early 1980's is when "trickle down" and "deregulation" originally became the buzz words of the in-crowd. I remember very well.

[hungry1968-16]

"...the longest recession since World War II..."





Thank you conservatives.

Thank you for the epic failure and the trashed economy.

[itgranny]

I don't have anything against Obama, I think he's doing the best he can under the circumstances.

But this bouncing nature that we're seeing in the stock market is NOT a good sign. Unfortunately, these wall street companies are pulling another fast one on us just like the oil speculators. They tell everyone that things are doing better. A whole bunch of us little people sigh in relief, put our money in and then they pull the rug out at the next news cycle. Somebodies making fast money off the stock market being like this, but it's not the little guy who's retirement is tied up in it.

It can not be thought that these companies' are in better shape now because they laid off a bunch of people and lowered their output to make their books look better. Those laid off people aren't going to be buying as much as they did when they had better paycheck.

If we're going to get better, we're going to have to slow down the imports. Walmart and HP's might do well when they can bring over cheap stuff from china, but it comes back around and bites us in the rear because now we're having to pay for the people that aren't producing bicycles, tv's, clothes.... That's the REAL cost and until our people in office figure that out, we're going to continue to suffer while the fat cats get richer.

[grabandgo]

our president and tax cheat timmy gave them the keys to the city.
They protected Wall Street and the thieves. You and I will see tax increases like you never saw before.