DJIA / Weekly Wrap for Week Ending 08/26/11

The Dow ends the week at 11,284.21, up +4.3% for the week. Nasdaq was up +5.9%, S&P 500 +4.7% and Russell 2000 +6.2%. Year-to-date gains for the major indices stand at -2.5% for DJIA, -6.5% Nasdaq, -6.4% S&P 500 and -11.7% for the Russell 2000.

The S&P 500 rallied 4.7%, marking the first weekly gain in more than a month. Stocks gained in four of the five sessions, though there was still plenty of volatility.

Buying interest was broad-based with all 10 sectors advancing more than 2.0%. Recently hard-hit cyclical sectors outperformed. Consumer Discretionary rallied 6.0%, tech gained 6.2% and industrials advanced 6.0%.

The main item this week was a statement from Fed Chairman Ben Bernanke at Jackson Hole, Wyoming. Bernanke noted again that the economic recovery has been less robust than what had been hoped, but restated that the FOMC is prepared to employ tools as needed. The benefits and costs of additional stimulus were also discussed, but at this time the Fed appears to have no plans of making any changes to monetary policy. The market initially extended its losses following Bernanke’s speech, but quickly rallied to positive territory to end the week on a positive.

Bank of America (BAC 11.3%) continued to make headlines throughout the week. Buffett’s Berkshire Hathaway (BRK.A 2.1%) invested $5 bln in exchange for preferred shares and warrants. The move helped lift shares of BAC to a weekly gain of 11%.

Apple (AAPL 7.7%) gained 7.7% even as Steve Jobs announced he is stepping down as CEO. Health concerns have been well known so the market had already priced in the possibility of Jobs stepping down.

Outside of equities, gold prices fell 1.2% as margin requirements were raised. Crude oil prices climbed 4.1% and the 10-year Treasury yield increased about 12 bps to 2.19%

PSVIX, my favorite mutual fund,was up +4.95% this week and is down -4.13% for the year.

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