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U.S. Stock Market Report Period August 29-September 2, 2011

U.S. Stock Market Report Period August 29-September 2, 2011

The entire month of August has been an interesting one where the global stock market is concerned. The see-sawing ride started from the end of July continued throughout August. Investors across the globe continue to be cautious as all eyes remain focused on the US economy as the beacon of light.

Sluggish Job Report Puts Damper on Stocks
The much awaited job report for August has only served to put an even bigger damper on a month of lackluster stock market performance. The new figures revealed that an estimated 14 million Americans are out of work. Of this number slightly less than eight million have been out of a job for up to six months, while another six million or more have not been able to find employment for over six months.
These kinds of statistics can’t promote any kind of confidence that the economy and the job market prospect are improving. When the figures were released on September 2, stocks fell more than anticipated. Investors are not comfortable with this sign of no or very little economic growth and the 9.1 unemployment rate is even more worrying. A report from US Department of Labor indicating that the farming sector had no new employment during the month of August only made things worse.
These dismal employment figures provided fodder for Republics to criticize President Barack Obama’s economic policies. Among those speaking out were Ron Paul, Michele Bachmann and Mitt Romney, pointing out that strategies to revive the stagnant economy are not working.

All Major Indices Closed on a Losing note on Friday, September 2
The major stock market indices all closed on a losing note on Friday. This was not a total surprise after the labor statistics were revealed. The Nasdaq Composite went to 2,480.3 after losing 65.71 points. A 253.31 points loss had the Dow Jones Industrial Average (DJIA) closing the day at 11,240.26, while the Standard & Poor 500 (S&P 500) closed at 1,173.97 after losing 30.45 points.
Of the 30 blue chip companies that make up the ratings for the Dow, Cisco was the only one showing some positive signs. The company’s stock inched upwards by one percent.

Commodities Market Upbeat
It is not all doom and gloom however as the commodities market is benefiting from the downswing in stocks. Gold and U.S treasuries remain strong, with gold prices reaching $1876.90 per ounce after an increase of $47.80, or 2.6 percent. Other commodities benefiting from falling stock market activity at the close of the week were wheat and corn. Wheat prices increased by 1.9 percent while corn increased by an impressive 2.9 percent.
Not unexpectedly, oil didn’t fare as well as the price dropped by almost 2.5 percent. This was spurred by fears that consumption would fall based on the minimal activity in the US industrial sector.

Banking Sector Also Slowing
The banking sector did not escape the negative impact of the past week. All major banks recorded losses in their stock over the period, with Bank of America’s stock falling by 3.2 percent, Citigroup, Inc. by 3.4 percent, JP Morgan Chase & Co by 3.4 percent and Morgan Stanley by 3.2 percent. The situation in the sector has not been helped by Litton Loan Servicing (a former subsidiary of Goldman Sachs Group, Inc.) coming under scrutiny concerning its ‘foreclosure practices’. This has resulted in the Goldman Sachs shares falling by 3.5 percent.
When the market opens on Tuesday after the US Labor Day weekend, stock market watchers will be keenly eyeing activities in a month historically known to be one of the slowest where stocks are concerned.

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