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The positive surprise was enough to propel benchmark indexes to their biggest advance since July and send safe havens like Treasuries and dollar lower.  Caterpillar Inc. (NYSE:CAT) and Alcoa Inc. (NYSE:AA) advanced at least 5.1% after the Commerce Department said the economy returned to growth following four straight quarters of decline.  Crude prices jumped $2.44, or 3.1%, to $79.87 and gold was up $16.50 to $1046.40.

The S&P 500 registered its biggest one-day gain since July 23, jumping 2.2% to close at 1,066.11.  The 30-share Dow Jones industrial average shot up by 199.89 points, or 2.05%, at 9,962.58 and the tech-heavy Nasdaq Composite index 37.94 points, or 1.84%, to 2,097.55.  The advance was broad-based on the New York Stock Exchange where advancing issues ran ahead of those that declined by a five-to-one margin.  Treasuries also took a beating after an auction of seven-year notes received a weaker-than-expected response.  As the month-end nears, the DJIA has advanced 2.6% in October; the S&P500 0.9%, while the NASDAQ remains 1.2% lower for the month.

A lackadaisical third-quarter performance from Exxon Mobil (NYSE:XOM) could not dampen the mood either and the company’s shares edged up 0.16%.  Procter & Gamble (NYSE:PG), also a Dow component, reported weaker quarterly earnings but revenue was above expectations. The consumer products maker also raised the low end of its fiscal 2010 earnings forecast and its shares rose 4%.

Twenty-eight of the DJIA's 30 components finished higher while all ten industry sectors of the S&P500 rose during the day, led by advances in basic materials (+4.1%), financials (+3.9%), oil and gas (+2.4%), consumer services (+2.4%), and industrials (+2.2%). 

Among financials, MetLife Inc. (NYSE:MET) jumped 7.9% to $36.84 ahead of its earnings report.  After the close, the biggest U.S. life insurer reported estimate-topping third-quarter operating earnings of 87 cents a share.  Lincoln National Corp. (NYSE:LNC) surged 14% to $25.34 after it reported first quarterly profit in a year that was also ahead of estimates.

Meanwhile, the International Monetary Fund sharply boosted its outlook for Asian economic growth. The IMF also raised its next year's guidance.  The IMF now expects economic growth of 2.8% this year and 5.8% next, up from last May's estimates for 2009 growth of 1.2% and 2010 growth of 4.3%.

Firms reporting their earnings include: Chevron (NYSE:CVX), Duke Energy (NYSE:DUK), Sony (NYSE:SNE), and Weyerhaeuser (NYSE:WY).

Rate of growth of real GDP (annual rates), 1947:Q2 to 2009:Q3. Shaded regions represent dates of recessions as declared by NBER.

Consumption spending is the biggest component of GDP and the main contributor to third quarter growth, accounting by itself for 2.4 percentage points out of the 3.5% total, and with consumer purchases of motor vehicles and parts alone 3/5 of the contribution of consumption. Next in importance was inventory rebuilding, which added 0.9 percentage points to the total and could make a significant further contribution in the quarters ahead. Housing is finally making a positive rather than a negative contribution, and nonresidential fixed investment was a smaller drag than I had been expecting. Imports grew faster than exports, though I'm relieved that trade overall is coming back. The government sector made a smaller contribution than one might have thought given the fiscal stimulus, in part because lower state and local spending offset some of the increased federal spending. For a healthier long-run growth path I'd prefer to see business fixed investment and net exports adding rather than subtracting. But, compared with what we've been seeing recently, this overall is a quite welcome report.

With the new third quarter numbers, we are ready to calculate our Econbrowser Recession Indicator Index for the preceding quarter (2009:Q2). This is a pattern recognition algorithm for identifying recessions that waits one quarter for data revisions and clear trend identification before making an assessment. Based on the 2009:Q3 GDP numbers just released, the value that the algorithm assigns to the second quarter of 2009 is 84.6-- based on currently available data, it looks like the economy was still in recession as of the second quarter of this year. We'll declare the recession to be over when the index falls below 33. At that time, we'll use the full set of revised data available as of that date to assign a most probable date for the end of the recession.

The plotted value for each date is based solely on information as it would have been publicly available and reported as of one quarter after the indicated date, with 2009:Q2 the last date shown on the graph. Shaded regions represent dates of NBER recessions, which were not used in any way in constructing the index, and which were sometimes not reported until two years after the date.

Other takes on today's numbers were provided by WSJ Real Time, Calculated Risk, Jon Hilsenrath, Economix, and Justin Fox, whose general theme seems to be concerns about whether this growth will be sustained into 2010.

The Nikkei 225 stock average fell 1.8% to 9,891.10 and Hong Kong’s Hang Seng index plunged 2.3% to 21,264.99 points. In Mainland China, the Shanghai Composite Index dropped 2.3% to close at 2,960.47.  All other major indices in the region ended in the red.   

On Wednesday, US stocks tumbled after a weaker-than-anticipated new home sales report aggravated concerns that the seven-month old rally has gone ahead of any economic recovery.  To add to the bearish sentiment Goldman Sachs lowered its projection for the third-quarter gross domestic product.  The government's report on third-quarter GDP is due Thursday.  Goldman Sachs said it now predicts third-quarter GDP rose at an annual rate of 2.7%, weaker than its earlier forecast of a 3% rise. 

This morning the Commerce Department reported the economy grew at a 3.5% rate.  The economy's return to growth follows four straight declines. The stimulus spending and the government ‘s cash-for-clunkers program is expected to have boosted consumer spending in the quarter, with residential investments also higher.

The Dow Jones industrial average dropped 119 points, or 1.2%, to close at 9,762.69 and the S&P 500 index declined 21 points, or 2%, to close at 1,042.63. The Nasdaq composite plunged 56 points, or 2.7%, to close at 2,059.61.  Volume on the NYSE jumped to 1.68 billion shares as declining issues ran ahead of those that advanced by a whopping nine-to-one margin.  The market's volatility index, the CBOE Vix, continued higher, up 12.4% Wednesday to 27.91.  Riding high on their safe-haven appeal, US Treasuries headed higher and the $41 billion 5-year note auction received good response. Prices on the 10-year increased 10/32 in price, dropping the yield to 3.415%.

All ten S&P500 sectors were in the red yesterday, led by falls in basic materials (-4.0%), oil and gas (-3.2%), financials (-2.9%) and industrials (-2.6%).  The US dollar continued its advance for the fifth straight day, trading up 0.5% against a basket of currencies.  The dollar’s rise saw commodities retreating. Crude prices fell 2.8% to $77.79.

Today's reports include: Allergan (NYSE:AGN), Eastman Kodak (NYSE:EK), ExxonMobil (NYSE:XOM), Monster Worldwide (NYSE:MWW), Procter & Gamble (NYSE:PG), and Sprint (NYSE:S).

Chicago, IL – October 15, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Limited Brands (LTD), Kohl's (KSS), Target (TGT), Ross Stores (ROST) and TJX Companies (TJX).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Retailers’ Registers Are Ringing

Consumers are showing a willingness to spend, even as they watch their budgets.

On Wednesday, the Commerce Department said that retailers saw sales rose 0.5% last month, excluding motor vehicles and parts. Furniture & home furnishing stores, health & personal care stores, general merchandise stores and gasoline stations all saw increases of 0.8% or better.

(The hangover from the Cash for Clunkers program resulted in an 11.8% drop in sales at auto dealers. This skewed the overall change in retail sales down to -1.5%.)

The increase may seem surprising given the economic backdrop. After all, unemployment is rising towards 10% and another wave of foreclosures could be forthcoming as adjustable rate mortgages reset. On the other hand, the majority of Americans are employed and the improving economic data is probably giving consumers some confidence, even if the sentiment surveys are less clear.

Plus, the Commerce Department's data is backed up by rising sales at several retailers. For instance, Limited Brands (LTD), Kohl's (KSS) and Target (TGT) saw an improvement last month.

Of course, some of the biggest increases continue to occur at the discount retail chains. Ross Stores (ROST) and TJX Companies (TJX) both said September same-store sales jumped by 7% or more.

Sales Benefiting From Several Factors

There was no single key driver to explain the improvement in sales. Traffic was better and Target noted that the average transaction continues to improve. Executives at a warehouse a large warehouse chain observed that though coupon use has increased, consumers are still spending essentially the same amount of the register.

Unseasonably cool weather may have also played a role. TJX saw increased demand for fall apparel. The good weather across much of the country may have also given people reason to go out and shop. Not to mention that the calm hurricane season probably helped stores in the Southeast.

Again, the economy is also playing a role. With business conditions stabilizing, consumers are more willing to open their wallets. Though spending patterns will remain comparatively depressed well into 2010, and probably longer, even relatively small increases can make a difference in the data.

Retail Remains A Top Sector

Despite rising unemployment, Retail has been among the top-ranked sectors for many months. Several retailers have been able to top analyst expectations, resulting in positive earnings estimate revisions.

Last week, several companies raised their third-quarter guidance, including KSS, ROST, TJX and TGT. Though LTD did not provide any guidance, 10 out of the 15 covering analysts raised their third-quarter projections. The full year Zacks Consensus Estimate has recently been raised on all 5 companies.

There is no doubt that retailers still face challenging conditions. The National Retail Federation expects holiday shoppers to spend 1% less this year than last year. However, as long as retailers continue to perform better than expectations, their stocks should continue to rise.

Zacks Rank and Industry Classification

ROST, TGT and TJX are Zacks #1 Rank ("strong buy") stocks and are classified in Retail-Discount.

LTD is a Zacks #1 Rank stock classified in Retail/Apparel-Shoe. KSS is a Zacks #1 Rank stock classified in Retail-Regional Department Stores.

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(The hangover from the Cash for Clunkers program resulted in an 11.8% drop in sales at auto dealers. This skewed the overall change in retail sales down to -1.5%.)

The increase may seem surprising given the economic backdrop. After all, unemployment is rising towards 10% and another wave of foreclosures could be forthcoming as adjustable rate mortgages reset. On the other hand, the majority of Americans are employed and the improving economic data is probably giving consumers some confidence, even if the sentiment surveys are less clear.

Plus, the Commerce Department's data is backed up by rising sales at several retailers. For instance, Limited Brands (LTD), Kohl's (KSS) and Target (TGT) saw an improvement last month.

Of course, some of the biggest increases continue to occur at the discount retail chains. Ross Stores (ROST) and TJX Companies (TJX) both said September same-store sales jumped by 7% or more.

Sales Benefiting From Several Factors

There was no single key driver to explain the improvement in sales. Traffic was better and Target noted that the average transaction continues to improve. Costco (COST) executives observed that though coupon use has increased, consumers are still spending essentially the same amount of the register.

Unseasonably cool weather may have also played a role. TJX saw increased demand for fall apparel. The good weather across much of the country may have also given people reason to go out and shop. Not to mention that the calm hurricane season probably helped stores in the Southeast.

Again, the economy is also playing a role. With business conditions stabilizing, consumers are more willing to open their wallets. Though spending patterns will remain comparatively depressed well into 2010, and probably longer, even relatively small increases can make a difference in the data.

Retail Remains A Top Sector

Despite rising unemployment, Retail has been among the top-ranked sectors for many months. Several retailers have been able to top analyst expectations, resulting in positive earnings estimate revisions.

Last week, several companies raised their third-quarter guidance, including KSS, ROST, TJX and TGT. Though LTD did not provide any guidance, 10 out of the 15 covering analysts raised their third-quarter projections. The full year Zacks Consensus Estimate has recently been raised on all 5 companies.

There is no doubt that retailers still face challenging conditions. The National Retail Federation expects holiday shoppers to spend 1% less this year than last year. However, as long as retailers continue to perform better than expectations, their stocks should continue to rise. This is why I hold Retail SPDR (XRT) in Zacks ETF Trader.

Zacks Rank and Industry Classification

ROST, TGT and TJX are Zacks #1 Rank ("strong buy") stocks. COST is a Zacks #2 Rank ("buy") stock. All of them are classified in Retail-Discount.

LTD is a Zacks #1 Rank stock classified in Retail/Apparel-Shoe. KSS is a Zacks #1 Rank stock classified in Retail-Regional Department Stores.

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Oct 14
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down
Consumer Staples	2.69	2.72	3.72	201	54
Conglomerates	2.69	2.77	1.67	15	9
Construction	2.85	2.89	1.56	64	41
Retail-Wholesale	2.85	2.85	3.34	468	140
Computer and Technology	2.86	2.87	2.57	583	227
Auto-Tires-Trucks	2.91	2.79	1.68	32	19
Consumer Discretionary	2.94	3.02	1.69	181	107
Business Services	2.94	2.99	1.38	66	48
Medical	2.95	2.96	1.43	277	194
Basic Materials	2.96	2.98	1.63	201	123
Industrial Products	2.99	3.02	1.12	93	83
Finance	3.11	3.07	1.48	651	440
Oils-Energy	3.12	3.04	0.88	288	326
Utilities	3.13	3.12	0.67	45	67
Aerospace	3.25	3.18	0.77	24	31
Transportation	3.27	3.29	1.00	123	123

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Zacks Investment Research

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The Trade Deficit increased to $32 billion in July, expected to increase to $27.3 billion, following $27.5 billion in June (revised from $27 billion), and $26 billion in May.  July exports increased by $2.7 billion to $127.6 billion, offset by the increase in imports by $7.2 billion to $159.6 billion.  The increase in exports was a result of increased export goods by $2.7 billion - automotive vehicles, parts, and engines; capital goods; industrial supplies and materials; consumer goods; and other goods – and increased export services by $0.1 billion - other transportation (which includes freight and port services) and small increases in several other categories of services exports.  Imports increased by $7.0 billion – reflecting increases in imports of automotive vehicles, parts, and engines; consumer goods; industrial supplies and materials; capital goods; and other goods - and import services increased by $0.2 billion – increasing in categories of other transportation and travel.

The Commerce Department provided the July figures of the trade balance of the U.S. relative to selected trading partners, in billions of dollars, with surpluses in Hong Kong ($1.3), Australia ($0.7), Singapore ($0.7), and Egypt ($0.2).  Deficits were recorded, in billions of dollars, with China ($20.4), the European Union ($8.0), OPEC ($6.9), Japan ($3.9), Mexico ($2.9), Venezuela ($2.3), Canada ($2.2), Nigeria ($1.7), Korea ($1.0), and Taiwan ($0.7).

Upcoming Releases
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Certainly Thursday's report of a 0.1% decline in U.S. retail trade and food services sales for July was a disappointment. Dan Greenhaus explains why he found the number startling:

The cash for clunkers program was expected to have had quite an effect on retail sales. However motor vehicle and parts rose only 2.4%; expectations had looked for a gain more than double. Sales at auto and other motor vehicle dealers were up just 2.8%, a healthy gain to be certain but far less than many economists expected. The initial impression is that, perhaps, some of the cash for clunkers sales will find their way into the August data.

The auto numbers are indeed surprising, since we know directly from industry counts that the number of autos sold in the U.S. was up 16% in July. I'm wondering if the reason that didn't show up in the retail sales report may be due to the definitions used by the Commerce Department:

Sales are net, after deductions, of refunds and allowances for merchandise returned by customers. Sales exclude sales taxes collected directly from customers and paid directly to a local, state, or federal tax agency.

Though I haven't seen a direct statement on this, if sales exclude taxes, they should also exclude subsidies, meaning if someone bought a $20,000 new car with a $3,500 cash-for-clunkers trade-in, Commerce may have counted that as $16,500 in sales. Perhaps the basic message from these numbers is that the government was willing to spend money in July, but nobody else was.

The one solidly positive U.S. economic indicator I've seen was the report from the Federal Reserve that U.S. industrial production was up 0.5% in July, the first monthly increase since December 2007. Capacity utilization was also estimated to have risen to 68.5% in July, the first increase for that measure since October 2008. However, Dean Baker is worried that most of the increase in production came from the auto sector. My read on this therefore remains as it was on August 4:

If we'd seen these kinds of numbers in the absence of the cash for clunkers incentives, I would have viewed it as a strong suggestion that the economic recovery has begun. As is, I'm left wondering, and fundamentally not knowing, whether the auto figures signal the shift we've all been watching for, or sales stolen from September and October and delivered to July.

The economic recovery may well have already begun in Asia and Europe, and certainly the mechanics are in place for significant improvements in U.S. real GDP even without any changes in the underlying fundamentals. However, I remain persuaded that a real U.S. recovery requires an increase, nor further decreases, in the number of Americans working.

Thursday's modest bump up in the 4-week average of initial claims for unemployment insurance suggests to me that that goal is a little farther away now than it was a week ago.

Seasonally adjusted weekly new claims for unemployment insurance (black line) and 4-week average (blue line) so far this year.

The Dow Jones industrial average declined 39 points, or 0.4%, the Standard & Poor's 500 lost 3 points, or 0.3%, and the tech-heavy Nasdaq composite retreated 18 points, or 0.9% after disappointing data on private payrolls and the services sector dented some optimism.  However, the Commerce Department reported an unexpected 0.4% rise in orders for manufactured goods in June.  On the NYSE, volume was a moderate 1.53 billion as decliners outpaced advancing shares by 8 to 7

Treasuries fell, with the 10-year declining 19/32 and the corresponding yield rising to 3.762%. Commodity prices rose, with crude prices up 55 cents to $71.97 per barrel, rebounding from initial declines posted after weekly inventory stats showed a larger-than-estimated build of 1.67 million barrels.

Seven of the ten S&P industry groups declined.  Financials again were the leading gainers on the S&P 500, rising 2.9%, as investors assessed the favorable impact of gains in mortgage applications and expectations that loan losses may have reached their peak. On the DJIA, Bank of America (NYSE:BAC) rose 6.5% and was the leading gainer in the Dow average. American Express (NYSE:AXP) added 5.8% and JP Morgan (NYSE:JPM) increased 3.9%. American Express (NYSE:AXP) reported a 5.8% increase in credit card defaults, representing a smaller pace for the second straight month, due in part to a lower-than-anticipated number of bankruptcies.  This morning, Keefe, Bruyette & Woods analysts noted that Bank of America (NYSE:BAC) may report slight losses in the third and fourth quarter before turning profits in 2010.

Procter & Gamble (NYSE:PG) slid 2.8% after the company reported an 18% decline in quarterly profit.  World’s second-largest video game publisher Electronic Arts (NYSE:EA) fell 6.8%.

On the S&P 500, troubled-insurer AIG (NYSE:AIG) shares rallied 62.7% as Radian's (NYSE:RDN) $231.9 million quarterly profit helped sentiments.  Radian's (NYSE:RDN) shares surged 83%.  AIG is expected to report quarterly results on Friday.  Fannie Mae (NYSE:FNM) rose 29.8% and Freddie Mac (NYSE:FRE) jumped 31.1% on news of the impending resignation of the director of the Federal Housing Finance Agency. Citigroup (NYSE:C) trading action marked a one-day, single-stock NYSE record Wednesday as 347 million shares traded. The firm launched its $2.5 billion 5-year note sale.

Leading the decliners on the S&P 500 were telecommunications (off 1.6%), health care (-1.3%), oil and gas  (-1.1%), utilities, consumer goods and technology (-0.9%), industrials (-0.8%), consumer services (-0.5%).  Helped by a rise in commodity prices, only basic material shares showed some strength, adding 0.6%.

As expected, the Bank of England held benchmark interest rates unchanged at 0.5%; however, it also expanded its asset purchase plan $84 billion. Meanwhile a Chinese central banker indicated interest rates could go up, advising of plans to "fine tune" credit policy. As global rate talk swings between hawkish and accommodative, risk assumptions may sway as well, with the more hawkish tone suggesting brighter recovery prospects near at hand.

An unfavorable weather is expected to have hurt retailers' comparable sales results last month, with Costco's (NASDAQ:COST) sales down 7%, Big Lots’ (NYSE:BIG) declining 2.4%, Stage Stores’ (NYSE:SSI) declining 11.9% and Limited Brands’ (NYSE:LTD) decreasing 7%.

This morning’s US stock futures indicate a sharply higher opening, helped by positive signs emanating from overseas markets.  Today, Chinese stocks hit a 14-month high after data showed manufacturing activity is expanding in the country.  The Shanghai Composite Index rose 50.53 points, or 1.5%, to close at 3,462.59 points and Hong Kong's Hang Seng index rose 223.93 points, or 1.1%, to 20,807.26.  However, Japan's Nikkei 225 stock average bucked the trend, closing down 4.36 points, or about 0.1%.

On Friday, the Commerce Department said that U.S. gross domestic product – a measure of all the goods and services produced – contracted at a 1% annual rate last quarter, compared with economists’ expectations of a 1.5% contraction and markedly better than first quarter’s 6.4% pullback. 

The Dow Jones industrial average edged up a paltry 17 points, or 0.2%; while the S&P 500 managed to end the day in positive territory.  The tech-heavy NASDAQ, however, lost 0.3% to close the day at 1979.  Of the 67% S&P500 companies that have reported their earnings so far, about 76% have exceeded Street estimates and only 14% have reported a miss. On the New York Stock Exchange, 1.52 billion shares exchanged hands as advancing issues beat declining stocks three to two.  

Over the weekend, Treasury Secretary Geithner noted signs pointing to an economy starting to turn around, although echoing expectations that unemployment numbers may not begin to recover until the second half of 2010.  Economist Nouriel Roubini advised, "There is now potentially light at the end of the tunnel," with previous Fed Chairman Greenspan concurring, as he also noted the recession may be ending.

Today's primary posts include vehicle sales for July, which are expected to have risen from the prior month to their highest since September, with analysts expecting car sales could even top a 12 million annual rate. Ford (NYSE:F) may show sales up from the previous year on the late-month surge in the government's successful "cash-for-clunkers" program.  Key market-moving data this week could be ISM manufacturing, the service sector survey, consumer credit, personal spending, with Friday seeing the release of the month's non-farm payroll report. 

Companies reporting their earnings today include: Humana (NYSE:HUM), Marathon Oil (NYSE:MRO), MGM Mirage (NYSE:MGM), Tyson Foods (NYSE:TSN), Anadarko Petroleum (NYSE:APC), Chesapeake Energy (NYSE:CHK), and Principal Financial Group (NYSE:PFG).

Rate of growth of real GDP (annual rates), 1947:Q2 to 2009:Q2. Shaded regions represent dates of NBER recessions.

On the other hand, our Econbrowser Recession Indicator Index is impressed with just how cold the winter was. This is a pattern recognition algorithm for identifying recessions that waits one quarter for new data and revisions before making a final assessment. Based on the 2009:Q2 GDP numbers just released, the value that the algorithm assigns to the first quarter of 2009 is 99.7, the highest reading since 1980. We'll declare the recession to be over when the index falls below 33.

The plotted value for each date is based solely on information as it would have been publicly available and reported as of one quarter after the indicated date, with 2009:Q1 the last date shown on the graph. Shaded regions represent dates of NBER recessions, which were not used in any way in constructing the index, and which were sometimes not reported until two years after the date.

In terms of specific factors contributing to the 2009:Q2 growth rate, consumption spending, housing, nonresidential fixed investment, inventory change, and exports each subtracted almost 1%-- had it not been for the positive contribution from falling imports and increasing government spending, the Q2 number would have been -4.3% instead of -1%. Should we be cheering the fact that falling imports were a key factor preventing GDP from declining even more? Falling U.S. imports can create problems for those countries trying to export to us and are a symptom of a very weak U.S. economy. But lower U.S. imports are a necessary element of our longer run adjustment process, and indeed, if the increase in U.S. private saving were just matched by the decrease in U.S. imports, we'd be exactly where we want to be in both the short and the long run.

Of course, we're not there at the moment, not even close, but I find some things to cheer about in the other components of GDP as well. It would take nothing more profound than for inventories to stop falling for GDP growth to be 1% higher over the next year than it was over the last. Indeed, it's reasonable to expect inventory rebuilding to make a positive contribution to GDP growth rates for the second half of the year. A similar calculation holds for housing. If the value of new homes built in the second half of the year remains at the same extremely low levels we saw in the first half, the GDP growth rate will be 1% higher. And it looks like home sales could well be higher, not just constant between 2009:H1 and H2.

On the other hand, it's hard to see nonresidential fixed investment making a positive contribution any time soon.

But by all means, go ahead, take your shirt off. As long as you understand that it's still plenty cold out there.

The Commerce Department provided the April figures of the trade balance of the U.S. relative to selected trading partners, in billions of dollars, with surpluses in $0.3, and Egypt $0.2.  Deficits were recorded, in
billions of dollars, with China $17.5, OPEC $4.1, Mexico $3.9, the European Union $2.8, Japan $1.9, Venezuela $1.3, Taiwan $0.9, Nigeria $0.8, Korea $0.7, and Canada $0.6.

Upcoming Releases
Treasury Budget (07/13 at 2:00 PM EST)
Retail Sales (07/14 at 8:30 AM EST)
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With the second-quarter scheduled to end early next week, financials with gains of more than 25% over the past three months are expected to report strong second-quarter earnings, as successful equity offerings of more than $259 billion that tripled the previous quarter's offering show the sector's strength.  However, toxic assets plaguing the balance sheets of financial firms continue to worry analysts.  Also, JP Morgan (NYSE:JPM) expects a 5% to 10% correction in the S&P 500.         

On Friday, a Commerce Department report said personal spending rose a modest 0.3% in May, but savings rate jumped to 6.7%. The news troubled investors as the jump in savings indicated consumers were opting to be very careful with their expenses.  Although higher savings is good for individuals, it may hurt the prospects of a nascent economic recovery. 

The Chairman of Obama's Council of Economic Advisers, Christina Romer, this morning noted that the Obama Administration's $787 billion fiscal stimulus package will boost growth over the next few months; however, Ms. Romer warned against prematurely cutting off monetary easing measures.

Premarket futures are holding steady in front of consumer price data, weekly crude inventory statistics, current account data, the administration's financial regulatory reform plan and Fed Chairman Bernanke's speech this morning.

Among DJIA components, only Microsoft (NASDAQ:MSFT) and Pfizer (NYSE:PFE) recorded gains while Bank of America (NYSE:BAC) led the decliners with a 4.5% fall.  In the absence of a fresh catalyst, the three-month old rally, which has driven S&P 500 to a gain of 35% after it hit 12-year lows on March 9, appears to have run out of steam and many analysts have been predicting the rally may be over. 

During the three-month old rally, basic material sector shares have jumped 31.5%, industrials have surged 23.8%, financials are up 22.3% and technology sector shares have gained 22.0%.  Although the rally in stock prices has been taken as a proof for economic recovery, Fed Governor Kevin Warsh chose to take a different stance last evening, cautioning, "The panic's hasty retreat should not be confused with robust recovery."  Warsh noted private demand, in spite of a surge in government spending, remains weak. 

Best Buy's (NYSE:BBY) 7.3% plunge yesterday underlines that weak sentiment.  Retail shares went lower Tuesday after Best Buy reported a 6.2% drop in comparable quarter sales; the electronic goods retailer reported inline sales growth of 12.3% to $10.1 billions and better-than-expected earnings, before items of 42 cents a share, versus estimates of 34 cents; the firm provided inline fiscal 2010 guidance of $2.50 to $2.90 a share.  Citigroup (NYSE:C) CEO Pandit also cautioned on consumption trends, advising firms look outside US borders for growth as US consumers adjust to reduced economic growth prospects and less credit availability.

The Commerce Department said May housing starts jumped 17.2% to a greater-than-expected 532,000 annual rate.  Permits also beat estimates of 508,000, rising 4% to 518,000 annually.  Nevertheless, housing remains weak by historical standards, as starts are still down 45% from a year earlier and permits are 47% lower.

The Commerce Department provided the April figures of the trade balance of the U.S. relative to selected trading partners, in billions of dollars, with surpluses in Hong Kong $1.4, Australia $0.6, Singapore $0.3, and Egypt $0.2. Deficits were recorded, in billions of dollars, with China $16.8, the European Union $5.3, Mexico $4.1, Japan $3.2, Canada $1.2, Venezuela $1.0, Taiwan $1,0, Korea $1.0, and Nigeria $0.7.

Today at 2:00 PM EST, the Department of Treasury will release the balance of the Treasury Budget for May, with an anticipated deficit of $176.1 billion, following the reported $20.9 billion deficit in April.

The Fed's Beige Book will also be made available today at 2:00 PM EST, which will be the topic of discussion at the closed door FOMC meeting on June 23rd and June 24th, with a policy statement scheduled to be released at the close of the meeting on June 24th at 2:15 PM EST.

Upcoming Releases
Fed's Beige Book (06/10 at 2:00 PM EST)
Treasury Budget (06/10 at 2:00 PM EST)
Retail Sales (06/11 at 8:30 AM EST)
Initial Claims (06/11 at 8:30 AM EST)

Chicago, IL - June 8, 2009 - Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes National Semiconductor (NSM) and The Talbots Inc. (TLB). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.

The Week's Events

S&P 500 members Brown Forman (BF.B), National Semiconductor (NSM) and Pall Corporation (PLL) headline what will be a very light earnings calendar. Only 37 companies are confirmed to report.

On the economic front, the Fed will release its periodic Beige Book on Wednesday afternoon. The next morning we will get May retail sales numbers from the Commerce Department.

• Tuesday: April wholesale inventories
• Wednesday: Fed Beige Book, April trade deficit, May treasury budget, weekly crude inventories
• Thursday: May retail sales, weekly initial jobless claims
• Friday: Initial June University of Michigan consumer confidence, May import and export prices

Three Fed officials are scheduled to speak. Governor Daniel Tarullo will talk about financial regulation at the Peterson Institute for International Economics in Washington, D.C. on Tuesday. On Wednesday, Governor Elizabeth Duke will deliver a lunchtime speech about consumer protection in Cleveland. Finally, Atlanta Fed Reserve President Dennis Lockhart will talk about the economy at a conference in Atlanta on Thursday.

The smartphone market will be in focus.

Palm's (PALM) next generation phone, the Pre, goes on sale tomorrow (Jun 6). Expect to hear some discussion about sales and initial reaction by customers.

Competitor Apple (AAPL) is expected to release details about a new iPhone. A software developers conference starts on Monday and there is speculation that Steve Jobs will be the one introducing the new mobile device.

The markets are stuck in a trading range. Given the light amount of data, there doesn't seem be a reason to think that things will change this week.

This said, keep an eye on Wednesday and Thursday, however. The combination of the Beige Book, speeches from Fed officials, oil inventories and a 10-year treasury auction (Wednesday at 1 p.m.) could get some traders to be more active.

Companies That Could Issue Positive Earnings Surprises

Fiscal-fourth quarter estimates for National Semiconductor (NSM) have been gradually improving. The current consensus estimate, which calls for a loss of 44 cents per share, is 3 cents better than the average forecast of a month ago. The most accurate estimate is slightly more bullish and calls for a loss of 42 cents per share. Though NSM has topped expectations twice in the past 4 quarters, it has also missed twice, so this is a risky call. National Semiconductor is scheduled to report on Thursday, Jun 11, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

The Talbots Inc. (TLB) has not only disappointed investors for 2 consecutive quarters, but it missed estimates by wide margins. Brokerage analysts are bracing for a first-quarter loss of 49 cents per share, but the most accurate estimate suggests the retailer could post a wider loss of 52 cents per share. Talbots is scheduled to report on Tuesday, Jun 9, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206.

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=3568.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

On the economic front, the Fed will release its periodic Beige Book on Wednesday afternoon. The next morning we will get May retail sales numbers from the Commerce Department.

• Tuesday: April wholesale inventories
• Wednesday: Fed Beige Book, April trade deficit, May treasury budget, weekly crude inventories
• Thursday: May retail sales, weekly initial jobless claims
• Friday: Initial June University of Michigan consumer confidence, May import and export prices

Three Fed officials are scheduled to speak. Governor Daniel Tarullo will talk about financial regulation at the Peterson Institute for International Economics in Washington, D.C. on Tuesday. On Wednesday, Governor Elizabeth Duke will deliver a lunchtime speech about consumer protection in Cleveland. Finally, Atlanta Fed Reserve President Dennis Lockhart will talk about the economy at a conference in Atlanta on Thursday.

The smartphone market will be in focus.

Palm's (PALM) next generation phone, the Pre, goes on sale tomorrow (Jun 6). Expect to hear some discussion about sales and initial reaction by customers.

Competitor Apple (AAPL) is expected to release details about a new iPhone. A software developers conference starts on Monday and there is speculation that Steve Jobs will be the one introducing the new mobile device.

The markets are stuck in a trading range. Given the light amount of data, there doesn't seem be a reason to think that things will change this week.

This said, keep an eye on Wednesday and Thursday, however. The combination of the Beige Book, speeches from Fed officials, oil inventories and a 10-year treasury auction (Wednesday at 1 p.m.) could get some traders to be more active.

Companies That Could Issue Positive Earnings Surprises

Fiscal-fourth quarter estimates for National Semiconductor (NSM) have been gradually improving. The current consensus estimate, which calls for a loss of 44 cents per share, is 3 cents better than the average forecast of a month ago. The most accurate estimate is slightly more bullish and calls for a loss of 42 cents per share. Though NSM has topped expectations twice in the past 4 quarters, it has also missed twice, so this is a risky call. National Semiconductor is scheduled to report on Thursday, Jun 11, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

The Talbots Inc. (TLB) has not only disappointed investors for 2 consecutive quarters, but it missed estimates by wide margins. Brokerage analysts are bracing for a first-quarter loss of 49 cents per share, but the most accurate estimate suggests the retailer could post a wider loss of 52 cents per share. Talbots is scheduled to report on Tuesday, Jun 9, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Earnings Calendar

Here is a list of companies that we have confirmed will report during the week of June 8 - 12¹. Prices are as of Thursday's, June 4, market close.

Company	Stock	Zacks Estimate	Year Ago EPS	Last Qtr Surprise	Date	Time	Price
Ferrellgas -Lp	FGP	$0.65	$0.55	(7.6%)	6/8	N/A	$16.80
Fuelcell Energy	FCEL	($0.30)	($0.38)	(9.4%)	6/8	AMC	$3.74
Pall Corp	PLL	$0.42	$0.54	(13.6%)	6/8	AMC	$26.67
Quiksilver Inc	ZQK	$0.04	$0.30	22.2%	6/8	AMC	$3.28
99 Cents Only	NDN	$0.04	($0.06)	(5.3%)	6/9	AMC	$10.04
Cra Intl Inc	CRAI	$0.30	$0.48	(48.7%)	6/9	BTO	$28.63
Gigamedia Ltd	GIGM	$0.11	$0.20	(6.7%)	6/9	BTO	$6.31
Korn/Ferry Intl	KFY	($0.06)	$0.36	(20.0%)	6/9	BTO	$11.82
Movado Grp Inc	MOV	($0.48)	$0.05	(975.0%)	6/9	BTO	$8.15
Nci Bldg System	NCS	($0.14)	$0.85	8.9%	6/9	AMC	$3.99
Oxford Inds Inc	OXM	$0.25	$0.59	100.0%	6/9	AMC	$10.85
Pep Boys M M &J	PBY	$0.06	$0.00	11.5%	6/9	BTO	$7.81
Piedmont Nat Ga	PNY	$0.66	$0.66	(1.8%)	6/9	BTO	$23.11
Rentrak Corp	RENT	$0.05	$0.10	0.0%	6/9	AMC	$10.50
Shuffle Master	SHFL	$0.04	$0.09	(75.0%)	6/9	AMC	$4.25
Streamline Hlth	STRM	($0.02)	($0.09)	N/A	6/9	AMC	$3.48
Talbots Inc	TLB	($0.49)	$0.21	(258.2%)	6/9	BTO	$4.88
Titan Machinery	TITN	$0.13	$0.24	-14.29%	6/9	BTO	$16.06
Brown Forman B	BF.B	$0.49	$0.65	5.2%	6/10	BTO	$45.99
Hooker Furnitur	HOFT	$0.16	$0.23	5.0%	6/10	BTO	$12.00
Linktone Ltd	LTON	($0.02)	($0.18)	220.0%	6/10	AMC	$2.50
Measuremnt Spcl	MEAS	$0.00	$0.31	200.0%	6/10	AMC	$6.39
Mens Wearhouse	MW	$0.00	$0.20	62.5%	6/10	AMC	$18.43
North Amer Egy	NOA	$0.16	$0.66	44.1%	6/10	AMC	$7.75
Stewart Entrp A	STEI	$0.08	$0.15	(12.5%)	6/10	BTO	$4.90
Access Integr-A	CIDM	($0.21)	($0.43)	0.0%	6/11	N/A	$1.11
Arcsight Inc	ARST	$0.07	($0.03)	300.0%	6/11	AMC	$17.75
China Med Tech	CMED	$0.45	$0.53	268.8%	6/11	BTO	$25.01
Chindex Intl	CHDX	$0.10	($0.20)	(21.4%)	6/11	BTO	$8.69
Del Monte Foods	DLM	$0.26	$0.29	36.4%	6/11	BTO	$8.40
Herley Inds Inc	HRLY	$0.16	$0.15	220.0%	6/11	AMC	$11.02
Hoku Scientific	HOKU	($0.08)	($0.12)	(300.0%)	6/11	BTO	$3.12
Lululemon Athlt	LULU	$0.08	$0.12	33.3%	6/11	BTO	$14.08
Mds Inc	MDZ	$0.06	$0.06	(14.3%)	6/11	BTO	$5.44
Natl Semicon	NSM	($0.44)	$0.35	180.0%	6/11	AMC	$13.99
Repligen	RGEN	($0.06)	($0.10)	100.0%	6/11	N/A	$4.55
School Specialt	SCHS	($0.66)	($0.66)	(13.9%)	6/11	BTO	$19.69

BTO = Before The Market Open, AMC = After The Market Close

¹Some of the companies listed in the earnings calendar may not be in the Zacks Rank universe.

Zacks Investment Research

General Motors' shares were delisted by the New York Stock Exchange and were dropped from the Dow Jones Industrial Average. Dow Jones said General Motors and Citigroup (NYSE:C) will be officially dropped from the average on June 8 and will be replaced by Cisco Systems (NASDAQ:CSCO) and Travelers Companies (NYSE:TRV). Cisco Systems jumped 5.4% to $19.50 and Travelers Cos., the biggest U.S. property insurer by market value, added 3.1% to $41.91.  Dow Jones said Citigroup (NYSE:C) is being dropped from the average amid "a substantial restructuring which will see the government with a large and ongoing stake."

The Commerce Department said US construction spending rose unexpectedly in April, with total spending rising 0.8%, to a seasonally adjusted annual rate of $968.67 billion compared to March.  Wall Street had expected a 0.9% decline.  Prudential Financial (NYSE:PRU), meanwhile, refused to access government's program for additional funds, and announced plans to raise $1.25 billion through a common stock offering. SunTrust (NYSE:STI) which needs $2.2 billion in additional capital outlined by last month's stress tests, announced plans to raise $1.4 billion in a common stock offering.   

Government bonds fell again Monday, driving yields back near last week's highs with the yield on the benchmark 10-year note rising to 3.68% from 3.46% late Friday.  The Reuters/Jefferies CRB Index of 19 raw materials increased for a sixth day, adding 3.1%.  Exxon Mobil Corp. (NYSE:XOM) added 3.5% to $71.76 and Chevron Corp. (NYSE:CVX) jumped 3.8% to $69.21 as crude prices went beyond $68 per barrel.

Treasury Secretary Timothy Geithner arrived in China to reassure the country that its holdings of U.S. debt are safe even as government borrowing rises.

Yesterday the DJIA declined 0.3% and S&P was off 0.2%; tech-heavy Nasdaq managed a 0.1% gain. Among DJIA components, Citigroup (NYSE:C), Alcoa (NYSE:AA) and Hewlett-Packard (NYSE:HPQ) led the advancers with gains of 3.6%, 2.0%, and 2.4%, respectively.  Home Depot (NYSE:HD) shares declined 5.3%, after yesterday's 6.6% surge, as the company reported a decline in sales and margins, even though the company's earnings were above expectations.  American Express (NYSE:AXP), which said it is "very cautious about the economy" declined 5.1%, despite announcing cost-saving measures that include reduction of its workforce by 6%.  Moreover, the Senate approved a proposal to limit credit card companies' small-print ability to hike fees and rates.

Although the Obama Administration brought forth stricter fuel standards, General Motors (NYSE:GM) shares jumped 7.6%, even as CEO Henderson said auto sales is expected to remain weak. 

Morgan Stanley (NYSE:MS) said it raised $596 million through the sale of its former investment analysis unit.  Bank of America (NYSE:BAC) also said it raised $13.47 billion through a stock offering.  The bank, which has been told by regulators it needs $33.9 billion in fresh capital, has already raised $7.3 billion through the sale of China Construction Bank interest.  Yesterday's drop of 3-month Libor, which measures the cost of borrowing in dollars between banks, to 0.75% marks the 37th straight daily fall, according to Bloomberg.

Home Depot's (NYSE:HD) revenue declined 9.7%, although earnings of 35 cents a share beat Street estimates by 6 cents.  The company also reiterated its full-year earnings projections.

Housing scenario continues to remain grim with home construction unexpectedly declining in April. The Commerce Department said starts decreased 12.8% to a seasonally adjusted 458,000 annual rate compared with the prior month and widely missed estimates of 520,000. However, economists noted a 2.8% rise in single-family units, the second straight month of increases.  The leading indicator, housing permits, declined 3.3% to 494,000 units, also the lowest on record, off 50.2% y/y.

Today's key items include weekly crude stockpiles at 10:30 AM ET, with crude inventory estimated to have declined to 1.2 million barrels on the week, versus a 4.63 million fall prior.  Treasury Secretary Geithner is slated to speak at 9:30 ET.  Most importantly, the FOMC minutes of the April 29 meeting are due for a 2:00 PM ET release, expected to contain updates on the Fed's projections of growth, inflation and unemployment. Expectations are of a lowered GDP assumption to -1.2% from -0.9% in 2009, with 2010 unchanged at +2.9%, and 2011 increased to 4.2% from 3.9%.  Unemployment assumptions for 2009 may also have been increased to 9.4% from 8.7%. Any significant variation is expected to be market-moving.

The Commerce Department reported yesterday that U.S. retail sales declined 0.4% in April.  Economists had expected the number to remain unchanged.  Purchases at U.S. stores had tumbled 1.3% in March.

On Wednesday, U.S. stocks declined with the New York Stock Exchange witnessing the broadest sell-off in three weeks.  The Dow Jones Industrial Average shed 184.22 points, or 2.2%, to 8,284.89. The S&P 500 Index declined for the third straight session, wiping off most of the gains it made last week.  The benchmark declined 2.7% to 883.92, and has lost 4.9% since the beginning of this week.  The tech-heavy Nasdaq declined 3%, or 51.73 points, at 1,664.19. Shares of industrial producers and consumer-related businesses bore the brunt. On the NYSE, volume was heavy as 1.76 billion shares exchanged hands and losing stocks outpaced advancing issues by a sixteen-to-one margin.

Treasury prices rallied as the unexpected decline in U.S. retail sales pushed investors towards risk aversion.  Dollar rose 0.7% against a basket of currencies.  Copper prices fell 3.2%; The DJ-UBS commodity index was off 1.2%.

Premarket futures are almost flat as inline earnings from Wal-Mart (NYSE:WMT) provided little boost to sentiments. According to a Financial Times article by a former US comptroller general, David Walker, the US' AAA debt rating is imperiled by the government's current excessive spending levels.

Optimism on the Street related to yesterday's retail sales was short lived as analysts failed to adequately assess the one-time, positive impact of January and February rebates from Social Security, which had helped revive consumer spending early this year.  Excluding autos, sales declined 0.5%.  As investors turned to cut positions, retail shares suffered, with Saks (NYSE:SKS) dropping 11.9%, Macy's (NYSE:M) plunging 6.7%, Target (NYSE:TGT) declining 4.8%, Costco (NASDAQ:COST) losing 2.3%, and Wal-Mart (NYSE:WMT) declining 1.2%. Office Depot (NYSE:ODP) shares plunged 15% after Moody's (NYSE:MCO) lowered the firm's debt rating.  Citigroup (NYSE:C) raised Home Depot (NYSE:HD) to "buy" from "hold," saying it expects the company to exceed this year's estimates; although fellow retailers declined, the shares bucked the trend with a 0.8% gain.

Basic materials led the declining sectors, off 5.8%, after weak demand assumptions from any economic recovery in the near-term hurt prospects. Alcoa (NYSE:AA) shares declined 8.8% on reports China may have restarted up to 1.4 million metric tons of capacity in April. Industrial shares fell 4.2%.  Caterpillar (NYSE:CAT) shares declined 5.2%, General Electric (NYSE:GE) lost 5.6%, 3M (NYSE:MMM) fell 4.4%, and United Technologies (NYSE:UTX) lost 4.2%.

Financial shares were once again under renewed pressure, falling 5.0%, as investors pondered over the banks' ability to raise fresh capital from private sources. Among DJIA components, Bank of America (NYSE:BAC) plunged 9.5%, Citigroup (NYSE:C) lost 6.8%, and American Express (NYSE:AXP) declined 5.3%. BB&T (NYSE:BBT) joined the growing list of banks tapping the market to raise funds, selling 75 million shares at $20 apiece, a discount to Tuesday's close of $22.50.  SunTrust (NYSE:STI) declined 6.9%, even as Goldman Sachs (NYSE:GS) upgraded the stock to "neutral" from "sell," citing better-than-expected stress test capital-raising needs.

Technology stocks showed signs of strength.  IBM (NYSE:IBM) said it expects 2009 earnings to be at least $9.20, versus consensus projections of $9.11, and noted it is "ahead of pace" to meet 2010 earnings projections of $10 to $12 per share.

Treasury Secretary Geithner's positive comments of "welcome signs" in the housing markets failed to convince investors as RealtyTrac reported increased foreclosures in April, with one in every 374 US homes receiving notices. Beazer Homes (NYSE:BZH) shares plunged 21.8%, and Hovnanian (NYSE:HOV) declined 12.2%.

Today's economic news covers wholesale prices for April, expected to show prices increased 0.1%. Besides the Wal-Mart (NYSE:WMT) inline post, weekly initial jobless claims are also expected to rate high on sentiment's Richter scale, with traders hoping for a continued diminished pace of claims.

The Commerce Department provided the March figures of the trade balance of the U.S. relative to selected trading partners, in billions of dollars, with surpluses in Hong Kong $1.5, Australia $1.1, Singapore $0.5, and Egypt $0.3. Deficits were recorded, in billions of dollars, with China $15.6, the European Union $4.4, Mexico $3.9, Japan $2.6, OPEC $2.4, Korea $1.2, Taiwan $1.0, Venezuela $0.9, Nigeria $0.9, and Canada $0.8.

Today at 2:00 PM EST, the Department of Treasury will release the balance of the Treasury Budget for April.

Upcoming Releases
Treasury Budget (05/12 at 2:00 PM EST)
Retail Sales (05/13 at 8:30 AM EST)
PPI (05/14 at 8:30 AM EST)
CPI (05/15 at 8:30 AM EST)

According to the National Association of Realtors, pending home sales in March advanced 3.2%, topping expectations for a flat month. The result was also higher than the year-ago performance. Also on Monday, the Commerce Department announced that construction spending increased 0.3%, which was also better than expected.

The data initiated an upward trend not only for homebuilders, but for the market in general, as the Dow jumped by triple digits.

Even before today's news, though, DHI had been enjoying rising earnings estimates. The fiscal year ending in September is still expected to generate a loss, but 3 out of 15 covering analysts have raised estimates in the past month, narrowing that loss to 88 cents from $1. That includes a tightening of 6 cents in just the past week.

More losses are expected for the fiscal year ending September 2010 - but just barely. The loss estimate is currently at 2 cents, but, if the upward trajectory continues for DHI, then it's only a matter of time before this loss crosses into profitability.

The biggest news for DHI this week will be its fiscal second quarter report. Analysts believe the company will lose 31 cents for the period, which is a penny narrower than the month-ago estimate and 6 cents narrower than 3 months ago. DHI is coming off of a solid fiscal first quarter report, which included a loss per share of 20 cents that was narrower than both the year-ago loss and the consensus.

DHI is the only company from the Building - Residential/Commercial industry on today's Zacks #1 Rank List, which includes 227 stocks.

Zacks Investment Research