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The choppiness was fairly typical of late summer, when attendance on Wall Street is lighter than usual and stocks are more vulnerable to broad swings.

The S&P 500 Index fell 0.6%, to 1,295. The yield of the 10-year US Treasury note fell 5 basis points to 4.78%. In general, economic news came in slower than expected, especially in the USA where home sales figures dominated the news. In mid- August, we had inflation friendly reports and lower energy prices, but this past week we’ve had higher energy prices and US housing numbers that have enhanced worries about an economic slowdown.

In major news this past week, Federal Reserve chairman Ben Bernacke, when speaking at the annual Federal Reserve bank of Kansas City’s Economic Symposium in Jackson Hole, Wyoming, for global central bankers on Friday, did not address the housing concerns. Bernacke avoided any specific talk on interest rates, inflation or the pace of economic growth, instead focusing on the long-term benefits of globalisation.

Bernacke urged policy makers and the United States at large Friday to embrace the global economy and help those hurt by shifting economic patterns, saying disruptions caused by lost jobs or declining profits in some industries would be offset by stronger overall growth.

US light crude October delivery added 41 cents over the week to end at $72.51 a barrel on the New York Mercantile Exchange. The price of oil had surged through the early afternoon Friday as a tropical storm Ernesto pelted Cuba and headed for Florida.

We direct our readers to the upcoming USA economic numbers due out this week, which should prove important to the current direction of the financial markets. Personal income and spending, manufacturing, gross domestic product growth and employment for August are all due out this week.

UNITED STATES:

In the United States, continued slowing in the housing industry dominated last week’s economic reports. Sales of new and existing homes declined faster than economists expected, and the supply of available-but-unsold homes swelled. Existing-home sales in July were lower for the fourth straight month. Sales dropped 4.1% to an annual rate of 6.33 million units, steeper than the 0.9% decline that economists had expected and 11.2% lower than a year earlier.

The inventory of unsold existing homes, which has been steadily climbing since the fall, set another record in July. At the current sales pace, it would take more than 7 months to sell all of the available houses compared with 2005’s average of 4.5 months.

Sales of new homes also fell in July, by 4.3% to an annual rate of 1.07 million units. Economists had expected a decrease of 1.8%. New-home sales were 21.6% lower than in July 2005. The inventory of unsold new homes rose to a record 6.5 month supply at the current sales rate, which was slightly higher than in recent months.

In a non housing report, the US Commerce Department announced that orders for durable goods dropped 2.4% in July following two straight monthly increases. Larger than expected, the decline was attributable mainly to a drop in orders for civilian aircraft and motor vehicles and parts.

However, when transportation equipment is excluded, orders for capital goods were up 0.5% for the month and 10.7% year-to-date compared with July 2005.

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