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Caterpillar Gauges Video Review

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Factory Output Rises in August

Total industrial production increased 0.2% in August, which was above the expected reading unchanged. It is slower than the 0.9% increase in July, which was revised. The June reading was revised down to an increase of 0.1% from 0.4%. The absolute increase is weak on the side, but at least it was better than expected, and the underlying details are stronger than the headline number suggests (not great, but better than 0.2%). Compared with a year ago, total industrial production was up 3.4%.Normally, it would be OK, but out of a deep recession, it is weak and a substantial slowdown from what we saw last year.

Total industrial production includes not only the production of plants in the nation, but its mines and power plants as well. The production and consumption of electricity has generally much to do with time as it does with the overall economic activity. Much of the weakness of this month came from the Utilities. This could be an effect of Hurricane Irene, that millions were left without electricity.In addition, the heat wave in the South, especially in Texas and Oklahoma, was more intense in July than in August, and therefore the need for air conditioning was not as intense.

Wall Street gets into the thick of earnings season

After the obsession of policy the Federal Reserve last week, investors are now turning their attention on the tsunami reports business results.

September blue-chip Dow stocks are expected to disclose third quarter results this week: IBM, Bank of America, Johnson & Johnson, Caterpillar, McDonald's, American Express and Verizon.

As if this were not enough, the big banks are on tap too: Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo.The financial sector led the market lower end of the weekend, investors are worried about the impact of investigations into predatory practices of many banks and mortgage servicers.

But wait, do not forget technicians. The results are also due from Apple, the darling of the technology sector, and Yahoo, which has been the subject of takeover talks recently.

"The benefit will be the dominant theme," said Alec Young, equity strategist at Standard & Poor's. "Economic data is always important, but the gains will set the tone.