Throughout July, the debt situation at home and abroad was on everyone’s mind. The month closed without a solution to the US Government’s debt-ceiling dilemma, but Greece appeared to finally have a solution in place. Much of this Mediterranean country’s debt was converted to long-term loans with 15- to 30-year maturities to avert any short-term crisis. This resulted in a small, but short-lived, rally. On the home front, the possibility of a downgrade from the standard AAA bond rating the US had enjoyed for years has made many investors more than a little nervous about the future of everything from interest rates to stock prices. Now that we know that S&P has downgraded the US bond rating we can expect and fickle market for August. Down 650, up 450…

Hat Tricks for the Big Three in July

For the third month in a row, all three indexes were down for the month. In the last six days of trading, the Dow lost 4.5% of its value to close at 12,142, down from June’s ending figure of 12,414. The NASDAQ reflected similar changes finishing at 2,756 compared to June’s finish of 2,773. In July, the S&P closed at 1,292, a drop from June’s 1,320 closing figure. Although this doesn’t look good, the Dow is still up 271 points for the quarter and 566 points for the year. If you like to keep an eye on commodities, these values are up, a normal occurrence when stocks are down. Gold was priced at $1,625 at the end of July compared to $1,511 at the end of June. Silver, oil, and natural gas experienced comparable price increases.

July Ends with Better than Expected

If anyone can take their eyes off the debt-ceiling, they would be looking for job increases to signal an anticipated economic recovery. For the last week of the month, jobless claims decreased by 24,000 to 398,000; this is the first time in 16 weeks that this number fell below 400,000. Although the country still has a way to go and the number tends to waver, this is good news in an otherwise dismal month. To add to the positive side of things, the Pending Home Sales Index increased 2.4% to close at 90.9, an increase of 19.8% over the same period in 2010.

Additional Measures are Mixed

With every expert in the country, or maybe even the world, focused on the American economic recovery, several other leading indicators are worth mentioning. The Consumer Confidence Indicator is up by 1.9 points, the Leading Economic Index is up 0.3 percent, and the employment trends Index is up 0.5 percent. On the other hand, the help-wanted online measurement is down by 217,000 job postings and CEO Confidence has dropped by 12 full points.

July’s Dividend Paying Stocks

For once, even the Standards & Poor’s 500 Dividend Aristocrats took a hit in July 2011. This group of stocks continues to be up for the year, but monthly and quarterly numbers were all in the red this month. For total returns, the ending numbers were -3.75% for the month, -3.75% for the quarter, and 2.95% for the year. Price returns were -3.85% for the month, -3.85% for the quarter, and 1.5% for the year. Looking at the longer term, total returns at the one-, three-, and five-year marks were 17.03%, 9.47%, and 5.5%. Price returns were 13.69%, 5.98%, and 2.39%. For July, these were the top performing stocks in this category:

• VF Corp from the Consumer Discretionary sector trading at $115.80
• Target Corp from the Consumer Discretionary sector trading at $51.49
• Clorox from the Consumer Staples sector trading at $71.59
• McGraw-Hill Cos Inc from the Consumer Discretionary sector trading at $41.60
• McDonald’s Corp from the Consumer Discretionary sector trading at $86.48
• Coca-Cola Co from the Consumer Staples sector trading at $68.01
• Grainger, W.W. Inc from the Industrials sector trading at $148.37
• AFLAC Inc from the Financials sector trading at $46.06
• Cintas Corp from the Industrials sector trading at $32.55
• Exxon Mobil Corp from the Energy sector trading at $79.79

Most of the Industrial Sectors Were Down for July 2011

Eight of the 10 industrial sectors saw significant drops during July 2011. Energy and Information Technology saw a small amount of growth while Telecommunication Services and the Industrials sector were the clear losers. Although there was an overall drop of 2.15% for the month of July, the numbers were up for the year-to-date category and stellar for the one-year figure. In total, the industrial sectors are up 17.31% for the previous 12 months and 30.87% for the previous 24 months. The following list provides the performance rates by sector for July 2011:

• Energy sector, up by 0.64% for July, up by 39.66% for the year
• Materials sector, down by 3.39% for July, up by 22.74% for the year
• Industrial sector, down by 7.02% for July, up by 13.86% for the year
• Consumer Discretionary Spending sector, down by 1.47% for July, up by 26.56% for the year
• Consumer Staples sector, down by 1.65% for July, up by 14.16% for the year
• Health Care sector, down by 3.95% for July, up by 19.25% for the year
• Financials sector, down by 3.72% for April, up by 0.64% for the year
• Information Technology sector, up by 1.57% for July, up by 18.04% for the year
• Telecommunication sector, down by 6.67% for July l, up by 13.84% for the year
• Utilities sector, down by 1.11% for July up by 9.20% for the year
• Total, down by 2.15% for July, up by 17.31% for the year