Market Wrap For Friday, August 23rd: Market Rally Is No Fallacy

Despite weak economic data, markets rallied this afternoon pushing the major indexes (except the Dow) positive for the week.

Major Averages

The Dow Jones Industrial Average fell a gaind 46.62 points, or 0.31 percent, to 15,010.36.

The S&P 500 gained around 6.51 points, or 0.39 percent, to 1,663.47.

The Nasdaq lost 19.08 points, or 0.52 percent, to 3657.79.

New Home Sales

Although existing home sales beat analyst estimates, new home sales fell far short of what economists were looking for. Only 394,000 new homes were sold versus the consensus of 497,000.

Eurozone Confidence

European consumer confidence both rose for August and beat analyst estimates. Despite the increase, europeans are still very pestimtic about the state of their spending.

Commodities

Friday was a big day for gold as it broke through the $1,400 level and made an eleven week high. Nearing the equity market close gold was sitting at $1,398.76, up 1.42 percent for the day. Gold and silver futures also surged higher today, up 2.01 percent and 4.42 percent, respectively.

Oil moved higher today with brent at $110.99 and WTI at $106.37. Big moves up in oil at the end of the week can be attributed to violence in Egypt, chemical weapons in Syria, and rockets fired into Israel from Lebanon.

Agricultural commodity futures saw a bit of a boost today. Corn, wheat, and soybeans all advanced with oats slightly down.

Bonds
Treasury prices rose strongly on the day. The iShares Barclays 20+ Year Treasury Bond ETF TLT climbed 1.07 percent to $104.27.

Yields were as follows on Friday afternoon: The 2-Year Note was yielding 0.38 percent. The 5-Year Note was yielding 1.63 percent. The 10-Year Note and 30-Year Bond were yielding 2.82 percent and 3.79 percent at last check.

Currencies

The U.S. Dollar was mostly unchanged for the day. Heading into the equity market close, the PowerShares DB US Dollar Index Bullish ETF UUP, which tracks the performance of the United States Dollar versus a basket of foreign currencies, was down 0.2 percent to $21.99.

The closely watched EUR/USD was last trading up 0.20 percent to $1.3383. Other big moves include the USD/BRL group was down 3.14 percent to $2.3588. The USd and Indian Rupee group fell almost two percent heading into the close to 63.3525.

Volatility and Volume

The VIX fell just 3.73 percent to 14.21 with little movement late in the day.

Once again, volume was light on the day. Roughly 65 million shares of the SPDR S&P 500 ETF SPY traded hands today versus the three month average of 128,588,599.

Stock Movers

Renren RENN shot up 4.71 percent to $3.56 after Baidu stated its plans to buy 59 percent interest in Renren's Nuomi for $160 million in cash.

Microsoft MSFT got a boost up 7.35 percent to $34.77 after the company reported that its CEO Steve Ballmer will retire within the next 12 months.

Autodesk ADSK was also up, gaining 7.69 percent to $38.91 after the company beat on the bottom line but showed weak guidance. The company was upgraded, which may be fueling shares further.

Aeropostale ARO was down 20.22 percent to $8.76 after the company posted a loss in the second quarter and issued a weak view for the third quarter. Analysts at Bank of America downgraded the stock from Buy to Underperform.

Pandora Media P shares tumbled 12.9 percent to $18.91 after the company reported issued downbeat earnings forecast for the third quarter. Stifel Nicolaus downgraded the stock from Buy to Hold.