Market commentary

The Dow Jones Industrial Average suffered its worst performance since the throes of the financial crisis in 2008 last week, dropping 740 points or 6.4%. Sentiment soured over the week on the prospects of a weak U.S. economy and an unresolved crisis in Europe.

In today’s economic data the Commerce Department reported purchases of new houses in the U.S. declined in August to a six-month low as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties. Sales dropped 2.3% to a 295,000 annual pace, while the median price slumped 7.7% compared to August 2010.

The economic data calendar is full this week with data on the housing sector, consumer confidence, manufacturing activity and inflation, and the U.S. Treasury is also auctioning 2 year, 5 year and 7 year notes.

After last week’s volatility this morning is a yawner as we see stock slightly higher and bonds fading. The yield on the 10 year note has risen to 1.86% and mortgages are worse by approximately .25%.