US Stock Market Overview – Stocks Rise, Finishing the Month up 2%, Utilities Drive Gains

US stocks ended a volatile quarter in the black with all three major averages finishing the session on a positive note. Softer than expected Chicago PMI date failed to drag on yields, as the dollar continued to hit fresh highs. The dollar index, which measures the dollar versus a basket of currencies, hit a fresh 28-month high. The higher dollar is generally a drag on multinational companies and positive for domestic US companies. Most commodities were under pressure as the dollar gained traction which weighed on energy shares. Most sectors were higher, led by cyclical, the energy was the worst-performing sector down more than 1%. For the quarter, the S&P 500 was up approximately 1% and for the month of September, the S&P 500 index was up 2%.

The VIX volatility index moved slightly lower on Monday, declining by 4% and closing the quarter at 16.50. The VIX hit a high of 21% in September and a low of 13.5%. The VIX is hovering near the 200-day moving average. Generally, October is a volatile month. Over the past 15-years the VIX volatility index has increased 60% of the time for an average increase in the value of the VIX of 9%.

Soft Data Buoys Yields

US yields finished the quarter in the red following a weaker than expected Chicago PMI. The business barometer dropped to 47.1 in September from 50.4 in the prior month. Expectations had been for a reading of 50. The barometer averaged 47.3 in the third quarter, the lowest level since the U.S. exited recession in the middle of 2009.

Consumer Spending Was Flat

US consumer spending barely rose in August. The Commerce Department reported that US consumer spending, edged up 0.1% last month as an increase in outlays on recreational goods and motor vehicles was offset by a decrease in spending at restaurants and hotels. Data for July was revised slightly down to show consumer spending increasing 0.5% instead of the previously reported 0.6% advance.