Sailing downwind can be very tricky; certainly not as easy as it looks. A slight shift in the wind can send the mainsail boom sweeping across the boat with terrific speed and force. An alert skipper or crewmember who sees the sail flatten abruptly yells the warning  jibe which means to duck or find yourself in the drink with a knot on your head.

Have they executed a perfect landing by slowing the economy just long enough to wring out inflation while keeping growth alive? After slowing steadily for the last four quarters, the economy is giving strong signs that it may be back on a growth track. Today’s report from the Labor Department shows that employers added 157,000 jobs in May. It demonstrates that employers are optimistic about their businesses and it makes consumers feel better about their own jobs. Another report showed that personal spending rose in April by .5% following a .4% increase in March. Corporate earnings from S&P 500 companies gained 11.6% in the first quarter, which is three times more than analysts' estimates at the start of the reporting season. As the data shows an economy resuming healthy growth, inflation remains tame.

Yesterday’s new home sales report surprised everyone as sales surged 16% in April, the biggest jump in 14 years. The news sent stocks surging higher with the Dow up 100 points before traders took a broader, dimmer view sending the Dow down 85 points, the S&P down 1% (short of its record yet again), and the NASDAQ down 1.5%. The S&P 500 and the Dow may end their seven-week gain streak with this week’s decline of 1% so far. The bond market has retreated for two weeks as yields have marched steadily higher.

Despite another week of lackluster news from the economy, the S&P 500 and the Dow Jones Industrial Average are headed for their seventh straight week of gains. The Dow has declined only 5 days out of the last 30. Record takeovers so far this year are steadily driving stock prices higher. Today’s prices are up on two more takeovers and a surprise increase in consumer confidence. The Reuters/University ofMichigan's preliminary index of sentiment rose to 88.7% this month from 87.1% in April. It was the first increase in four months as strength in the labor and stock markets overcame record gasoline prices.