July Rebound
The U.S. stock market as measured by the S&P 500 rose 0.8 percent last week to 987.48, the highest since Nov. 4, capping its fifth straight monthly advance. This benchmark rebounded an incredible 46 percent from a 12-year low on March 9. Last week, the Dow Jones Industrial Average rose 78.37 points, or 0.9 percent, to 9,171.61, extending its monthly advance to 8.6 percent, the biggest since October 2002. The Russell 2000 Index of small companies added 1.5 percent during the last week of July to 556.71.
The recent rally in stock prices has been fueled by companies reporting earnings above expectations. These companies include Motorola Inc., MasterCard Inc., Amgen Inc., the world’s largest biotechnology company, and Dow Chemical Co., the largest U.S. chemical maker. About three-quarters of the 148 companies in the S&P 500 that released second-quarter results this week topped estimates.
While stocks have been perofrming remarkably well, U.S. Treasuries rates are on the rise causing prices to decline. The two-year note yields rose the most in eight weeks after mixed results at this week’s four note auctions worried investors about the huge supply of government debt. U.S. Government securities have declined in price for four consecutive months, the longest losing streak since 1996. The Treasury sold $115 billion of notes over the five days ended July 31, including a record $42 billion of two-year securities and $39 billion of debt maturing in five years.