Stocks are clinging to positive territory this afternoon after consumer confidence came in slightly better than expected. But, there are additional economic releases that haven't been so great including the Chicago PMI report and the Case-Shiller update on metropolitan housing markets. The latter edged higher but reported before the open and didn't move the needle. Stocks actually bounced on the Chicago PMI report despite the fact it missed consensus. The 56.70 reading was well below the preceding month reading of 64.60 and missed consensus of 57.00. Individual components offered no help.

> New Orders 55.00 from 64.60
> Production 57.60 from 65.00
> Employment 55.50 from 56.60
> Prices Paid 57.20 from 58.10

Manufacturing has become very important in this struggling recovery so the Chicago number is more critical than ever.

Consumer confidence as measured by the Conference Board was better than expected. What jumped out to me is we are feeling better about the future which is vitally important as the long term health of the market will be self-determined. In July, there was a larger reading for jobs becoming worse.

Old Data Doesn't Move Market
By: David Urani, Research Analyst

Last week was a real stinker for housing reports, with new and existing homes sales hitting new cycle lows (record lows in the case of new homes). With that terrible news, housing sentiment is understandably poor as the fallout from the tax credit shows no sign of abating. However, so far there is no solid evidence that prices are falling. The Case Shiller report for June shows home prices increased by 1.0% month to month (up 4.2% year over year), with all 20 major regions posting increases except for a slight decline in Phoenix, and Las Vegas which continues to roll snake eyes. It is actually impressive that prices have held steady for so long, and in fact the index is up 6% from the April '09 lows.

While housing stocks are mildly positive today, they aren't jumping and that's because there is a heavy cloud hanging over the market and future reports have some hurdles to overcome. The fact is, this Case Shiller report, being from June, is two months old and we have already seen the dismal home sales numbers for July. In addition, June represents the final month that tax credit sales could be finalized, and that is likely supporting the home value readings for the month. Going into July, you can dig for silver linings but there simply isn't anything to suggest prices can keep rising. New lows for sales plus near-record highs for home repossessions and rising inventories make for a real dilemma for home sellers in July and beyond.

August Auto Sales Preview
By: David Silver, Research Analyst

As the calendar gets ready to switch to September (gosh where did the summer go?), we get ready for that fun day when the automakers release how many vehicles they sold over the past month. Throughout the summer (and even late spring), auto sales have been weakening as the strength of the economic recovery came into question. Additionally, after the incentive push following Toyota's (TM) massive recall, incentives have been reduced which has also kept consumers out of the showrooms. During the month of August, incentives are said to have increased approximately 1% to an average of $2,864, however, sales are still expected to be down dramatically both year over year and sequentially. Coming into August, there was no way this month (and September) would escape without some sort of asterisk. August 2009 saw the cash for clunkers program give a bump to auto sales. If we were able to see growth from last year, that would send automakers much higher, however, there is next to no chance of that. I have to leave the door open for the surprise out of left field, but I expect sales to be down almost 20% to 11.4 million vehicles, down from the 14.2 million in August of 2009.

The struggling economy and lackluster job growth has helped to push consumers to try to get that extra few months out of their current vehicle. Many people that could afford to get that new car have already done so, and many other Americans, worrying about if they will have a job come year's end, are willing to invest the $200, $500, $1,000 to keep their vehicle running instead of taking on more debt. There are some great new models hitting the market for the 2011 model year, however, the end of year enticements just haven't generated the buzz that many in the auto industry were hoping for.

Refer to our website at www.wstreet.com for the remainder of the article.

Final Note

The market is simply dragging in an environment where people have decided to wait it out.