Stocks continue to march higher, hitting a one and a half year high fueled by strong demand for industrials.

After the first two days of trading this week, the Dow Jones Industrial Average climbed 156 points, or 1.45%, to finish at 10,888.83, the S&P 500 added 14.27 points, or 1.23%, ending at 1,174.17, and the Nasdaq Composite gained 57 points, or 2.42%, to settle at 2,415.24.

Health care stocks were a laggard on Tuesday, but still posted another day in the green after President Obama signed a sweeping reform bill into law. Materials joined industrials as a market leader thanks to stabilizing gold, silver, and copper prices. Gold climbed 0.5% to settle at $1,105.20/troy oz, silver added 0.6% ending at $17.04/troy oz, and copper tacked on 0.25 to finish at $3.389/lb.

The resurgent residential real estate market may be showing signs of slowing after the latest existing home sales report. February sales slumped 0.6% compared with January, leading to a sharp increase in seasonal supply. On Tuesday, the FHFA reported seasonally adjusted home prices for federal agency sponsored mortgages declined 0.6% in January, on top of a 2% decrease for December. Although the buyer market does not appear to have been exhausted, federal stimulus and extraordinarily low rates can only prop up the market for so long. Wednesday’s new home sales report should provide further illumination.

Looking ahead, Wall Street will shift its focus from Washington to housing and GDP data, along with key earnings reports due up from Oracle and Best Buy.

Macroeconomic data due up this week:

Wednesday – New home sales (February), durable goods orders (February), oil inventories (Weekly)

Thursday – Jobless claims (Weekly), Federal Reserve balance sheet, money supply

Friday – GDP (Q4), Consumer Sentiment (March)

With a projected population of more than 310 billion Americans by the end of 2010, it is a wonder that there are not more traffic fatalities on U.S highways than what was recently reported. According to the government’s Transportation Department, the number of traffic deaths in 2009 retreated by nearly 9% over 2008’s tally. The 9% decline equates to nearly 3,000 fewer casualties than the previous year’s estimated count of 37,261.

The decline pushed the tally of highway deaths to levels not seen since 1954. Some experts believe that the decease is a direct result of the country’s economic troubles. There are supporting facts for their stand. As the price of crude and gasoline continue to climb higher, travelers and vacationers alike have curtailed their unnecessary road travel.

The overall number of U.S. highway deaths has steadily decreased since 2005, when the total was estimated to be more than 43,500 fatalities. In this year’s report, highway safety officials calculated that the number of fatalities per 100 million miles driven declined to 1.15 in 2009. That figure compares with 2008’s record low of 1.25.

Along with a sluggish economy, the Federal Highway Administration (FHA) revealed that several factors contributed to the decline in traffic deaths. Those factors included an increase in seatbelt usage, which climbed to 84% in 2009, along with local law enforcement upholding traffic laws, and cracking down harder on drunk drivers.

Safety officials have also seen the number of fatal accidents go down as newer cars hit the road. The implementation of side-curtain air bags, in both the front and rear of the car, has greatly improved the odds of surviving a potential deadly crash. A majority of newer cars also possess electronic stability control, which aids the vehicle in avoiding a possible rollover.

The FHA also showed that, despite fewer deaths, motorists traveled more miles, nearly 6.6 billion miles more, than in the prior year. The increase in miles traveled was 0.2% higher than was traveled in 2007 and 2008.
As the third month of 2010 gets into full swing, many Americans remain perplexed and concerned regarding the recent troubles on the highways involving countless vehicles produced by Japan’s top automaker, Toyota Motor Corporation (TM). Since the start of the year, Toyota has been in the spotlight and the light has only gotten brighter during the past several weeks.

With more than 24 million vehicle produced since 2007, Toyota has been knee-deep in recalls, as several vehicle models have been the focal point of braking problems and incidents involving the sticking of accelerator pedals. On January 21 of this year, the Japanese automaker recalled some 2.3 million Toyotas, not include the Prius, because of a pedal issue, which could cause unintended acceleration. To date, there have been more than 8 million Toyotas recalled worldwide.

Just a few weeks later, the company announced another recall, this time for the 2010 Prius, as well as other hybrids, in which the vehicle’s brakes could momentarily fail without warning. Nevertheless, U.S. sales of Toyota’s Prius jumped more than 10% in February, despite the recalls.

Following the recalls, Congress announced that a House panel would be getting involved in the recall matter, as it plans to examine the National Highway Traffic Safety Administration’s (NHTSA) oversight of the auto industry’s safety practices. Several proponents of NHTSA’s actions have fueled a controversy, citing that the government agency has become lackadaisical in enforcing vehicle safety standards from the Japanese automaker.

The NHTSA has already linked some 52 deaths to alleged accelerator problems.
Commenting in the current controversy was David Strickland, the NHTSA’s administrator, “We will be conducting a comprehensive review of electronic throttle technologies across the industry. We also want everyone to know that our agency has the most active defect investigation program in the world.”

Strickland revealed that the agency would also begin looking at push-button start and stop technology more closely to see whether or not that technology is safe for U.S. consumers. Strickland later added that the NHTSA receives more than 30,000 consumer complaints each year. However, in February alone, the agency received more than 10,000 grievances, primarily pertaining to Toyota’s misfortunes.

The NHTSA also remarked that during the past three years, the agency’s investigations have led to more than 23.5 million vehicle recalls involving more than 520 different incidences. Of the more than 23 million recalls, two out of every five complaints involved foreign-made vehicles.

Last week’s trading was overshadowed by several employment reports that proved troubling to Americans. After a positive start to the week, the remainder of the trading sessions showed immense volatility, which included a 3.1% drop in the S&P 500 on Thursday, marking its steepest decline since April 2009.

The most watched employment report, released on Friday, showed that the nation’s unemployment rate declined unexpectedly, falling to a reading of 9.7%, despite the fact that companies cut 20K jobs in January. The surprising drop in the rate was a result of the Labor Dept’s findings that newly employed workers increased by 541K during the month.

Moreover, the number of part-time workers looking for full-time work declined by nearly 1M people during the month, which lowered the underemployment rate from 17.3% to 16.5%. Nevertheless, for those with full-time positions, the average workweek increased to 33.3 hours, from 33.2 hours.

Wednesday’s ADP employment report showed that the private sector cut more than 22K jobs during the month of January, marking the 24th consecutive monthly decline. Although the decline was the smallest amount since January 2008, concerns remain especially after a record 736K jobs were lost last March.

Looking further inside the report, the ADP stated that the service sector gained 38K jobs, while goods-producing industries cut 60K positions, including 25K in the manufacturing sector. Additionally, large businesses reduced their staff by 19K, small businesses cut 12K jobs, and medium-sized businesses surprisingly added 9K positions, the first increase since January 2008.

A third jobs report last week from the job placement firm Challenger Gray & Christmas, announced that corporate layoffs surged 59% in January to more than 71K. The advance marked the first month-to-month increase since July. The data also showed that companies planned to hire more than 31K workers in January, down from the proposed hiring of nearly 36K workers in December.

The Labor Department remarked late last week that the number of new claims for unemployment benefits increased by 8K filings to a seasonally adjusted 480K, as the nation continues to struggle with layoffs and scarce employment opportunities. Economists had expected a drop in claims to 460K. Meanwhile, the number of people continuing to claim benefits remained unchanged at 4.6M.

On a positive note, orders for durable goods to U.S. factories surged by 1% in December, as the manufacturing sector remains supportive of the economic recovery process. With the 1% gain, it marked the eighth advance in the past nine months, and was double that of the 0.5% gain economists had anticipated.

The advance was led by increased demand for motor vehicles and parts, which advanced by 2.6%, while orders for defense aircraft and parts climbed 19.8%. However, orders for transportation equipment, which fell 0.5%, weighed heavily on the monthly report. Excluding transportation, factory orders would have risen 1.2%.

Despite the lack of creation of new jobs, employers managed to increase production during the 4Q, as companies continue to cut costs and postpone any new hiring initiatives. According to the Labor Dept., productivity increased by 6.2% during the quarter, just ahead of the 6% gain economists had projected. The substantial gain marked the third straight quarterly increase.

Through the past four quarters, productivity is up 5.1%, the most since a 12-month period that ended in the 1Q of 2002. Deeper inside the report, labor costs fell 4.4% during the 4Q, the third decline in the past four quarters. Hourly compensation rose 1.5% within the period, while hours worked increased 1%, the first increase since the 2Q of 2007.

With the nation’s focus on employment, the service sector expanded in January. The ISM Services Index increased to 50.5 in January, following a small increase to 50.1 in December. After a drop to 48.7 in November, economists were looking for the index to advance to a reading of 51 for January.

Included in the ISM report was the employment index, which climbed to a reading of 44.6 in January from 43.6 in December. Since December 2007, the employment index has been below 50 and hit its low of 31.1 in November 2008.

Furthermore, the new orders index advanced to 54.7% from 52% in December. The business activity index decreased from 53.2% in the previous month to 52.2%, while the price index climbed to 61.2% in January from 59.6%.

The week ahead will see a handful of economic data released that will include the Wholesale Inventories, Trade Balance and Business Inventory reports for December, as well as weekly results for Initial Claims and Crude Inventories.

The upcoming week will also include the Treasury Budget and Retail Sales readings for January, along with the Michigan Sentiment report for February.

The DOW closed the week lower, falling 55.10 points, or 0.5%, to close at 10,012.23. The S&P also finished the week in the red, slipping 7.69 points, or 0.7%, ending at 1,066.18. The NASDAQ concluded the week down, declining by 6.23 points, or 0.3%, to close at 2,141.12.

In a recent report from the Commerce Department, sales of new homes throughout the country plunged unexpectedly in September, falling 3.6% to an adjusted annual rate of 402,000 units. That figure comes in well below August’s rate of 417,000 and even further behind the 440,000 pace that economists were anticipating.

Sales of new homes posted its first decline since March, as sales through September remain nearly 8% below last year’s levels. Since hitting a “bottom” in January, the housing market has seen a 22% surge in new home sales. Nevertheless, sales are still more than 70% off their peak sales levels reached in July 2005.

With more than 251,000 new homes for sale by the end of September, the lowest amount in nearly 17 years, the median sales price of those homes was $204,800, down more than 9% from the previous year’s mean selling price of $225,200. However, the recent price did reflect a 2.5% increase from August’s price of $199,900.

Meanwhile, the Standard & Poor’s/Case-Shiller home price index revealed an increase of 1% from July’s reading, with a reading of 144.5 for August. Although prices have begun to decline at a much slower rate than in the past, prices remain more than 11% below last year’s prices in August.

A contributing cause to the lack of sales in September comes from the fast approaching expiration of the tax credit assessed for first time buyers. The $8,000 stipend has helped bolster a sector that many have come to blame for the nation’s current economic woes. The government’s tax credit program is set to expire on November 30. That means that if an offer would be accepted today, the buyer would most likely not be eligible for the tax credit as it usually takes between 45 and 60 days for a sale to be finalized.

Because of the recent economic turmoil, members from the National Association of Home Builders (NAHB) have called upon Congress to help extend the federal tax credit program in an effort to help stimulate the industry, as well as possibly creating hundreds of thousands of jobs. The NAHB is proposing to the Senate Banking Committee that the program be extend until November 30, 2010.

Commenting on the proposal is David Crowe, Chief Economist with the NAHB, “Not only will builders soon be losing one of their most effective selling tools when the federal housing tax credit expires, they are also facing significant challenges that threaten to derail the fragile housing recovery before it even has time to take root.”

Crowe later added, “Strict mortgage underwriting and low appraisals are making it difficult for a willing buyer to complete the sale and terms and credit availability for builder acquisition, development and construction (AD&C) loans are extremely tight. The bottom line is that housing and the economy are at a critical crossroads.”

If the program is extended, Crowe remarked, “We estimate this would increase home purchases by 383,000 and create nearly 350,000 jobs in the coming year. It would also generate $16.1 billion in wages and salaries; $12.1 billion in business income and tax income of $11.6 billion for federal, state and local governments.”

Announced on October 29, Congress took a step closer to finalizing a deal that would extend the government program. A Senate committee reached an agreement that would offer buyers a tax credit of $6,500, but for existing homeowners. The credit is aimed at repeat home buyers who have owned a home for at least five years and should have a substantial impact on those homeowners that may seem trapped in their existing homes.

If the Senate passes the bill, it would then go to the House of Representatives, who passed a similar bill extending benefits for unemployed workers last month. An obstacle for the proposal passing could be the overall cost involved. Lawmakers are estimating that the overall cost for extending the program could cost upwards of $10 billion.

Nevertheless, nearly 1.4 million first-time homebuyers have qualified for the government’s tax credit. The NAHB reported that an estimated 350,000 of those homes sold would not have taken place if not for the credit provided.

Another by-product of the tax credit’s termination is the decrease in mortgage applications and refinancing requests. Because many are not eligible to meet the deadline for the credit, should it expire, the Mortgage Bankers Association (MBA) revealed on October 28 that there is great uncertainty within the industry that when, or if, these supports are withdrawn, whether the marketplace has enough momentum to endure.

The MBA’s mortgage index for the week ending October 22 showed that mortgage applications plunged 12.3%, while purchase applications fell more than 5% that week. Furthermore, those seeking to refinance their mortgage rates plummeted 16.2%.

For those that actually do have the means and capital to purchase a new home, the good news is that the national average for a 30-year fixed mortgage rate continues to remain near the 5% mark, currently at 5.03%. For those looking to refinance their mortgage, the most popular choice, a 15-year fixed rate, currently stands at 4.46%.

With rates hovering around the psychological 5% level for quite some time now, it remains better than the 6.26% that homebuyers were looking at this time last year.

The day after President Obama addressed Congress on September 9 to shed some light on hopes of reshaping the national healthcare system, his speech received mixed reviews with most of the negative feedback coming from the GOP. One of the key points to the President’s speech was that those who currently have healthcare coverage would have greater security with his proposed policy.

A person, who has coverage, will not have their policy cancelled if they become sick, and for those that lose their jobs, supplemental plans would be offered at a more reasonable price.

The current administration is adamant about reshaping the nation’s healthcare system, following a report by the Census Bureau showing that the number of Americans without health insurance increased to more than 46 million in 2008. These figures do not reflect the numbers from the first half of 2009 in which hundred of thousands of workers lost their jobs as well as their health insurance.

In 2008, there were more than 46 million people without insurance, which represented 15.4% of all Americans. Despite that high number in ‘08, 2007’s figures did manage to retreat from the Census Bureau’s reading of more than 47 million without coverage in 2006.

As the recession lingers on, the country’s poverty rate surged to 13.2%, establishing its highest level in more than 11 years. The current rate follows 2007’s rate of 12.5%, or nearly 40 million, or 1 in 7 people living below the poverty line. The current poverty line stands at $22,025 per year for a family of four, before taxes.

In 2008, the median household income decreased to $50,303 for a family of four.

So what do these figures actually represent? First off, there were more than 7 million children throughout the country that did not have health insurance, nearly 10% of the population. One positive is that that number did recede from 2007’s total of 8.1 million children without provided care.

Looking at the statistics on an ethnicity basis, the number of uninsured Caucasians increased to 21.3 million, or 10.8%, up fewer than 1 million from 2007. Meanwhile, African-Americans held steady at 7.3 million, or 19.1%, while the uninsured rate for Asians jumped to 17.6%, up from 16.8%

Overall, Obama’s administration is looking to overhaul the $2.5 trillion U.S. healthcare system. The President assured the public that the reform would cut costs, regulate insurers to help protect consumers while expanding coverage and improving care.

As it currently stands, three committees within the House of Representative and one in the Senate have already completed their work on the proposed healthcare bill. Now this only leaves the Senate Financial Committee with the final say before the bill can be finalized.