The national unemployment rate dropped for the first time since April 2008 prompting a stock rally that retained most of the week s gains. Real estate and financial services ETFs rode the rally ahead of other sectors.

A better-than-expected July employment report showed that 247,000 jobs were lost during the month, less than the earlier 325,000 estimate. The national jobless rate dropped to 9.4% in July from 9.5% in June. The Dow Jones Industrial Average closed up 114 points to 9370. The Nasdaq picked up 27 to close at 200, and the S&P 500 finished at 1020, up 13 points.

While still far from a rosy picture, the employment figures provide strong evidence that the worst of the recession may be over.

The Dow gained 198 points for the week to close at 9172, and the S&P 500 picked up 23 points ending at 1010. For a detailed rundown on Friday s trading session see our market story.

Winners

The Vanguard REIT Index fund picked up 14.2% over the week as stronger home sales data and a more stable financial sector increased the sector s appeal. The SPDR KBW Bank fund rose 10.3% as investors pushed bank shares ahead of the rally.

Losers

The Claymore/AlphaShares China Small Cap fund dropped 5.5% for the week as commodities and metals prices ebbed and the possibility of tighter lending standards threatened to curb growth rates. The strong finish for stocks pushed investors out of safe havens dropping the iShares Barclays 20+ Year Treasury Bond fund by 3.6%.

This Week s Industry News

Data Point
State Street Global Advisors said SPDR Gold Shares led all exchange-traded products in the first quarter in terms of net cash flows by a margin of more than $9 billion. In its midyear review, it noted that there is a resurgent demand for emerging market products as well as renewed concerns surrounding inflation.

Launching Pad
A proposal for a fund-of-exchange-traded-funds designed by U.S. One Inc. has been filed with the Securities and Exchange Commission (SEC). The ETF includes international and U.S. funds in a long-term buy and hold strategy, according to the filing.

Claremont Investment Partners chief executive Virginia Dawson has filed a request with the SEC to launch the Nasdaq OMX Industry Leaders Index fund, which would track a large-cap index developed by the firm. The ETF would share aspects of the Industry Leaders Fund, a mutual fund and would charge an expense ratio of 0.49%.

Next Week s Notebook

Earnings and Conference Calls

Monday
4Kids Entertainment, Advanced Photonix, Allied Capital, BMP Sunstone, Capstone Turbine, China Eastern Airlines, Clear Channel Outdoor Holdings, CompuCredit, Constellation Energy Partners, E.W. Scripps, Fluor, Force Protection, GSE Systems, I-Flow, Lions Gate Entertainment, Loral Space & Communications, Nautilus, PokerTek, Priceline.com, Providence Service, Quicksilver Resources, Stifel Financial, Vanda Pharmaceuticals, Virgin Mobil USA, Wave Systems

Tuesday
Advanced Life Sciences, Altek, Applied Materials, Aramark, Avon Products, Bob Evans Farms, Celadon Group, Clearwire, Del Monte Pacific, Federal Agricultural Mortgage Corp., Fossil, InterContinental Hotels Group, Learning Tree International, Realogy, Solo Cup, Systemax, Trend Micro, Warnaco Group

Wednesday
Advance Auto Parts, American Defense Systems, BHP Billiton, CAE, Capstone Therapeutics, CTI Industries, Ethan Allen Interiors, Harris, Intelsat, LDK Solar, Liz Claiborne, Macy's, Maidenform, NetEase.com, Nortech Systems, Progressive, Rick's Cabaret International, Sara Lee, Stallion Oilfield Services, Toll Brothers, Tower Semiconductor,

Thursday
Accellent, Aker Solutions, Anheuser-Busch InBev, Autodesk, Blockbuster, Denison Mines, DeVry, Dr. Pepper Snapple Group, Elizabeth Arden, eMagin, Est e Lauder, Gildan Activewear, GNC, Henry Bros. Electronics, Image Entertainment, Insmed, Interleukin Genetics, Kohls, Nielsen, Nordstrom, Provident Energy Trust, Prudential, Red Robin Gourmet Burgers, Spectrum Pharmaceuticals, Spire, Ticketmaster Entertainment, Urban Outfitters, Vitamin Shoppe, Wal-Mart Stores, Yankee Candle

Friday
Abercrombie & Fitch, Dundee, First Capital Realty, First Data, Hydrogenics, JCPenney, NPC International, Transcept Pharmaceuticals

Economic Data

Monday
11:00 a.m. 4-Week Treasury Bill Announcement
1:00 p.m. 3-Month Bill Auction
1:00 p.m. 6-Month Bill Auction

Tuesday
7:45 a.m. ICSC-Goldman Store Sales
8:30 a.m. Productivity and Costs
8:55 a.m. Redbook
10:00 a.m. Wholesale Trade
1:00 p.m. 4-Week Bill Auction
1:00 p.m. 3-Yr. Note Auction

Wednesday
7:00 a.m. MBA Purchase Applications
8:30 a.m. International Trade
10:30 a.m. EIA Petroleum Status Report
1:00 p.m. 10-Yr. Note Auction
2:00 p.m. Treasury Budget
2:15 p.m. FOMC Meeting Announcement

Thursday
8:30 Retail Sales
8:30 a.m. Jobless Claims
8:30 a.m. Import and Export Prices
10:00 a.m. Business Inventories
10:30 a.m. EIA Natural Gas Report
1:00 p.m. 30-Yr. Bond Auction
4:30 p.m. Fed Balance Sheet
4:30 p.m. Money Supply

Friday
8:30 a.m. Consumer Price Index
9:15 a.m. Industrial Production
9:55 a.m. Consumer Sentiment