Stock Market News for September 1, 2010

U.S. stocks had their worst August in nearly a decade as lackluster economic data and the Federal Reserve’s conservative tone sent warning signals about the strength of the economic recovery.

Stocks had an almost lackluster session Tuesday and volume remained anemic. The Dow average and the broader S&P 500 index ended the session just above unchanged while the tech-heavy Nasdaq fell 0.3% to 2114.03. On the New York Stock Exchange, four stocks rose for every three that declined. The 30-share DJIA fell 4.3% during the month. The Nasdaq Composite index was the leading decliner among the three averages, falling 6.2%. The S&P 500 fared slightly better with a 5.9% decline. The CBOE Vix volatility measure, however, fell 4.3% to 26.05. The index rose more than 18% during the month.

This morning's futures indicate a strong start to the market, with basic material shares leading the charge on a strong manufacturing data from China. However, Gartner’s prediction that second-half computer sales would drop more than its earlier estimates is weighing on tech shares this morning.

Investors continued their flight to safe-haven instruments, sending gold and US Treasuries higher. Gold prices rose $11.20 to a two-month high of $1,250.30, and 10-year Treasuries gained 16/32 in price as the yield dropped to 2.474%. Crude prices slipped 8.9% during August, and are now off 9.4% year to date. Gold climbed 5.6% during the month for a 14.1% rally so far in 2010.

The Japanese yen continued its upward movement and was hovering near a 15-year high against the dollar. The yen’s rise is worrying Japanese firms that derive a major share of their revenue from exports.

Tech-shares led the losses, with Dow components Intel (NASDAQ:INTC - Analyst Report), Cisco (NASDAQ:CSCO - Analyst Report) and Hewlett-Packard (NYSE:HPQ - Analyst Report) dropping at least 13% during the month.

Read the full analyst report on INTC

Read the full analyst report on CSCO

Read the full analyst report on HPQ