Dow set for best September since 1939

chart_lookahead_100924.top.pngClick chart for more market data. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- The summer has come to an end, and so has the market slump that came with it. With little on tap to challenge the recent rally, stocks are on track to close September with the biggest monthly gains in over a year.

Though September is typically down month on Wall Street and the economic recovery remains sluggish, investors have taken cues from recent upbeat economic news to propel major indexes sharply higher during the month after a sell-off in August.

"We've been seeing modestly favorable economic numbers lately, which has allowed markets to keep moving up," said Stephen Carl, head equity trader at Williams Capital Group.

So far, the Dow has rallied 8.4%, which would be the best monthly gain since July 2009, when the blue-chip index added 8.6%. The latest lift also puts the Dow on track for its best September since 1939, when it rose 13.5%.

The S&P has rallied 9.5%, the largest increase since April 2009, and the Nasdaq has surged 12.6%, the biggest jump since October 2002.

Last week, stocks rose more than 2% after the major indexes broke above key technical levels early in the week. That encouraged investors to keep the momentum going, and stocks ended with a rally to fresh four-month highs.

Though the economy is still not out of the woods, analysts don't foresee a pullback in stocks in the week ahead.

"We've got a frilly light week ahead in economic data until the last couple of days, and as long those readings come in near expectations, the markets will be able to sustain the recent gains," said Michael Sheldon, chief market strategist at RDM Financial Group.

And even if poor economic news triggers some volatility and puts pressure on stocks, Sheldon said the recent momentum should be enough for investors to close September and the third quarter on a positive note.

On the docket

Monday: There are no market-moving economic or corporate events expected on Monday.

Tuesday: The Case-Shiller 20-city home price index is expected to have increased 3.4% in July after rising 4.2% in June.

After the start of trading, the Conference Board releases its Consumer Confidence index for September. Economists forecast the index to have edged down to 52.9 during the month from 53.5 in August.

Wednesday: The government's weekly oil inventory report is due after the start of trading.

Thursday: The third and final reading on gross domestic product growth in the second quarter is due before the bell. The economy is expected to have expanded at a 1.6% annualized rate, unchanged from the previous reading, and still sharply lower from the initial reading had been for a 2.4% growth rate in the period.

At the same time, the Department of Labor releases a weekly report on jobless claims. The number of Americans filing new claims for unemployment insurance is expected to have decreased to 457,000 last week from 465,000 in the previous week.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, are expected to have dropped to 4.45 million from 4.49 million claims the previous week.

The Chicago PMI, a regional reading on manufacturing activity, will be released after the bell. The measure is expected to have eased to 56.0 in September from 56.7 in August.

Friday: A government report on personal income and spending is due before the opening bell. Economists surveyed by Briefing.com expect income to have edged up 0.3% in August after rising 0.2% in July. Spending is forecast to tick up 0.3% after increasing 0.4%.

The University of Michigan's final reading on consumer sentiment in September is due shortly after the market open. It's expected to inch up to 67.1 from the last reading 66.6.

The Institute for Supply Management's (ISM) index of manufacturing is also due after the start of trading. Economists forecast the index to have slipped to 54.5 in September from 56.3 in August. Any number above 50 indicates growth in the sector.

Meanwhile, the government is expected to report that construction spending fell 0.5% in August, after dropping 1% in July.

Auto and truck sales for September are due throughout the day. To top of page

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