Markets inch upward for the week

NEW YORK – Trading was quiet this week, as summer vacations kept many traders out of the market. With fewer participants, the market lost some of its recent momentum that had sent the major indexes up about 5 percent in less than two weeks.

Stocks managed to carve out their sixth weekly advance in seven weeks, but the gains were minimal.

Wall Street turned cautious as investors worried that the market’s rally, now closing in on six months, may have run its course.

Investors are especially nervous as they head into September, historically the stock market’s worst month. Last September, which saw the collapse of Lehman Brothers and the kickoff of the worst financial crisis in decades, is still fresh in investors’ minds.

“Tuesday begins one of the most feared months of the calendar,” said Lawrence Creatura, portfolio manager at Federated Clover Investment Advisors.

The first week of September 2009 will bring a key report on manufacturing activity, which has been improving, as well as the Labor Department’s tally of job losses in August – the month’s most telling piece of economic data. Last month, news that employers cut fewer jobs in July and the unemployment rate fell sent stocks soaring.

On Friday, the Dow fell 36.43, or 0.4 percent, to 9,544.20. The Standard & Poor’s 500 index fell 2.05, or 0.3 percent, to 1,027.76, while Nasdaq composite index rose 1.04, or 0.1 percent, to 2,028.77.

As of Friday, both the Dow and the S&P 500 are on track to have their best Augusts since 2000, each up just over 4 percent for the month. That’s well above the S&P 500’s 20-year average of a negative return of 0.5 percent in August.

Most of the gains were made last week, after Federal Reserve Chairman Ben Bernanke’s upbeat assessment of the economy sent investors clamoring for stocks.