With a big rally on Friday, the U.S. stock market has not only posted its fourth consecutive week of gains, but this is shaping up to be the strongest September since 1939, when the S&P 500 index surged 15.5%.

Month-to-date, the S&P 500 index has gained 9.47%, with 487 issues advancing and 243 of them in the double-digit category.

It was quite a topsy-turvy week -- gains on Monday (1.52%) and Friday (2.12%) outweighed losses and lackluster trading on Tuesday, Wednesday, and Thursday. For the week, the market posted a 2.05% gain, with 418 issues advancing.

The market is now just 5.64% below the April 23, 2010, peak.

"Little was expected of September, and with three weeks of gains (7.31%) to protect going into the week, investors were ready for some profit taking," said Howard Silverblatt, chief index strategist at S&P.

"The market, however, both surged and declined slightly on higher, though not convincing, volume. While issues reacted to situations, there were no major items, with most non-financial issues up for the week."

During the week, economic reports remained largely mixed but were mostly interpreted as positive, based on the new "slow but steady" consensus thinking.

"The lack of selling, especially programmed, was encouraging throughout the week, but the increase in actual trading was expected to be higher, and to show commitment," Silverblatt noted.

"Many investors are still on the sidelines, nervous about committing new funds."

Looking forward, though, some black clouds loom.

"Of growing concern is the lack of policy with respect to 2011 taxes," Silverblatt said.

"The U.S. Congress has now postponed tax issues until after the November elections, with only a short session scheduled before major tax changes are implemented at year-end for both individuals and corporations."

The picture is expected to get worse, as congressional members vie for support before the election, making statements that may or may not translate into legislation (or their election).

"Earnings guidance continued to be negative, as companies pushed down estimates for [the third and fourth quarters], with some giving lower 2011 guidance," he added. "Individual reports and statements appeared to show that companies may be spending more of their record cash holdings, but questions remain about how much was for required maintenance, and how much was for growth.

Of special note, Apple (Nasdaq: AAPL) has gained 6.17% in the month, to reinforce its position as the second largest issue in the world behind ExxonMobil (NYSE: XOM).

"A dozen years ago Apple wasn't even in the top 500," Silverblatt added.


International Business Times, The Global Business News Leader

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