Stocks declined Friday as Dell shook up techs and Gustav rattled the market. But, as the summer comes to a close, some analysts are seeing a silver lining in the clouds.
All three major indexes finished lower this week, as oil advanced and no resolutions emerged from the financial sector, but gained more than 1 percent for August, with the Nasdaq up nearly 2 percent for the month.
The bond market closed at 2pm ET Friday ahead of the Labor Day holiday. All U.S. financial markets will be closed on Monday.
If you take a step back and look at the Dow chart for the summer, it's a wide V: Stocks skidded for the first half of the summer, touched down in mid-July and then began to recover on a shallow incline.
Some market watchers are looking to see if we retest those mid-July lows but Vince Farrell, chief investment officer at Soleil Securities Group said the bear bottom might be behind us. "The further away and the higher we get from the lows of July make the likelihood of revisiting those levels less likely," Farrell wrote in a guest blog post on CNBC.com.
Another trend has emerged: The number of new lows has dropped significantly, observes Jordan Kimmel, portfolio manager for Magnet Investment Group. "This means that we have an absence of downward pressure, and this is how big rallies begin to take place," Kimmel explains.
This is just an early sign, Kimmel says, and what needs to happen to get the market firmly on an upward trajectory is "significant sector leadership." He sees that possibility in health care, alternative energy and, to a smaller degree, in technology.
Indeed, there was cause for optimism heading into the long holiday weekend. However, Dell threw a monkey wrench into that, warning of "conservatism" in tech spending. Techs had been where traders were putting their money when they sold energy and materials stocks. If the outlook for techs isn't certain, what then?
And, let the investor beware: September is known as being the worst month of the year.
Light, sweet crudesettled at $115.46 a barrel, just a few cents shy of Thursday's close as a stronger dollar balanced worries about Tropical Storm Gustav's impending arrival in the Gulf Coast.