Sam Collins

Correction on the Horizon

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Yesterday the stock market, as measured by the Dow 30 Components, gained for the seventh consecutive day, but it was a struggle throughout the session to maintain a positive balance. Even reports of better new home sales and a higher-than-expected durable goods number had little impact, and stocks closed only marginally higher.

Annualized sale of new homes for July hit 433,000 units, while analysts had only been looking for 390,000 units. This is the largest month-over-month increase for July since 2005, and it helped to bring down inventory to a 7.5-month supply from an 8.5-month supply.

Also, the Commerce Department reported the largest increase in durable goods since July 2007. But, as I said, even this had little impact on the market. And with so little volume, it is difficult to assess the impact of the positive numbers since the market is in the hands of traders rather than longer-term investors.

Dow stocks Caterpillar (CAT), General Electric (GE) and 3M (MMM) fell along with JPMorgan Chase (JPM). But American Express (AXP), Intel (INTC), Coca Cola (KO) and McDonald's (MCD) all had close to or more than a 1% gain.

At the close, the Dow Jones Industrial Average (DJI) rose more than 4 points to 9,544, the S&P 500 (SPX) was slightly higher at 1,028, and the Nasdaq (NASD) gained fractionally to 2,024.