Weekly Recap - Week ending 05-Jun-09Helped by a strong rally on Monday, the major averages registered another positive week -- S&P 500 +2.3%, Dow +3.1%, Nasdaq +4.2%, Russell 2000 +5.7%. And with this week's gains, the Dow is now basically unchanged on the year (-0.2%), regaining most of its early 2009 losses.

The rally was led by the Industrials sector (+5.7%), followed closely by Technology (+4.3%) and Consumer Discretionary (+4.0%). Health Care (-0.4%) and Telecom (-0.8%) were the only two S&P sectors in the red.

Monday's strong rally actually began the previous Friday, when the stock market surged to fresh session highs in the last five minutes of trade. That momentum carried over into premarket trading Monday.

Stronger international markets also played a role, as PMI manufacturing data came out all over the world. Markets in China and Hong Kong rallied over 3% as the official figure showed expansion for the third straight month, while those in Europe rallied at least 2% as both the UK and Eurozone showed modestly better-than-expected numbers.

Finally, there was also pleasing U.S. economic data that morning. Most notably, Construction Spending surprisingly increased 0.8% month-over-month in April (consensus -1.5%), Personal Income increased 0.5% for the month (consensus -0.2%) and Personal Spending came in at a modestly better-than-expected -0.1% (consensus -0.2%).

The S&P gained 2.6% on the session, hitting fresh 2009 highs and closing above its 200-day moving average for the first time since December 2007.

One last event was the expected bankruptcy filing from General Motors (GM). The filing from the iconic manufacturer did not hamper Monday's rally on the thinking that concessions made by GM bondholders over the weekend would allow a new, more competitive company to emerge from bankruptcy sooner rather than later.

The moves in the major averages for the remainder of the week were more modest, though all four indices extended their multi-month highs on Friday before pulling back slightly.

Piece after piece of better-than-expected economic data played a part.

Tuesday brought Pending Home Sales, which showed a much larger-than-expected 6.7% month-over-month gain in April.

Thursday brought the first weekly drop in Continuing Jobless Claims in 20 weeks, as they came in at 6.735 million, down from 6.788 million the prior week and well below the 6.855 million consensus estimate. But while a step in the right direction, it's nothing to get overly excited about given that Federal Reserve Chairman Bernanke told the House Budget Committee on Tuesday that job losses are expected to remain significant in coming months.

Friday brought this week's most anticipated event, the employment report for May, and it didn't disappoint. Nonfarm Payrolls came in at -345,000, well below the -520,000 consensus estimate, while the prior two months saw positive revisions. The market surged premarket on the news, but its opening levels proved to be the highs of the session. Two reasons were the larger-than-expected jump in the Unemployment Rate (9.4% vs. 9.2% consensus) and the unexpected decline in Average Weekly Hours (33.1 vs. 33.2 consensus). The bottom line is the May report did not set a good stage for a meaningful pickup in consumer spending, even if it set the stage for an opening rally.

Looking ahead, next week is extremely thin in regards to catalysts. There once again are no notable earnings releases and the only important economic releases are the Trade Balance on Wednesday (6/10) and Retail Sales on Thursday (6/11). However, there will continue to be a number of companies presenting at industry conferences throughout the week, particularly Tuesday (6/9) and Wednesday.

Index	Started Week	Ended Week	Change	% Change	YTD %
DJIA	8500.33	8763.13	262.80	3.1	-0.2
Nasdaq	1774.33	1849.42	75.09	4.2	17.3
S&P 500	919.14	940.09	20.95	2.3	4.1
Russell 2000	501.58	530.36	28.78	5.7	6.2