U.S. stocks moved higher for a second straight day, capping off an incredibly volatile week.  Better-than-expected retail sales overshadowed a larger-than-expected drop in consumer confidence.

Last month’s 2Q GDP report showed a sharp deceleration in consumer spending, so the fact that retail sales in the U.S. climbed in July by 0.5% was a sight for sore eyes.  However, enthusiasm waned once the preliminary University of Michigan Consumer Sentiment Index showed consumers’ confidence fell more than expected in August to the lowest level since 1980.

Still, U.S. stocks managed to record their first back-to-back advance in three weeks – during these three weeks, by the way, the S&P 500 has recorded weekly losses of 3.92%, 7.19%, and 1.72%.

Seven of ten S&P 500 sectors record gains. Financials, which had been a steady broad market driver for most of the week, experienced a 1.2% loss on lingering uncertainty about their fundamental health and exposure to potentially problematic markets.  Utilities and Telecoms, both defensive in nature, were the only other two sectors that suffered losses.

Treasurys finished mostly higher, with the two-year yield unchanged at 0.18%, the 10-year note dropping 10 basis points to 2.24%, and the 30-year yield falling 8 basis points to 3.72%.  (Bond yields fall as bond prices rise.)

Across the pond, Europe’s markets were boosted by short-selling bans announced in France, Spain, Italy, and Belgium.  News that French and German leaders will meet Tuesday also gave investors hope will lead to progress in resolving the debt crisis.

Brent will be back tomorrow.  Performance tables after the jump…

Market Activity for August 12, 2011

Sector Activity for August 12, 2011

Have a great day!

Peter Lazaroff, Investment Analyst

St. Louis, MO

Acropolis Investment Management