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Hardly a Market Correction... Yet

Tickers in this article: LEN SPY TOL
NEW YORK (TheStreet) -- Unless you owned stocks in the precious metals mining sector, last week's market drop probably caused you some serious indigestion.

Yet the Dow Jones Industrial Average ended last week at 15,081.47, still ahead for the year by about 15%. That's not as good as the 19.5% gain for the DJIA reached on Aug. 2, but no one should be wringing their hands.... yet. Much will depend on what the Federal Reserve, and we should get some hints today when the Fed releases minutes from last month's Federal Open Market Committee meeting.

The S&P 500 index also had its biggest weekly decline since June, but the index is really down only just over 3% since it closed near the 1,710 level on Aug. 2.

Here's a five-year chart of the S&P 500 as measured by the SPDR S&P 500 ETF . XSPY ChartXSPY data by YCharts

Going back to 2008 when the stock market fell off a cliff in the second half of the year, the period from July through November hasn't been good for the broader stock market indices.

Usually when the stock market is in correction mode, Treasuries move higher. Last week was different as the value of the 10-year Treasury plummeted, causing the yield to spike to a two-year high of almost 2.83%.

The higher interest rates on the 10-year Treasury affects mortgage rates since the note is the benchmark for mortgages. Mortgage rates are climbing, which is affecting mortgage applications. Wall Street is concerned that this will crimp the housing recovery.

Last Wednesday, the Mortgage Bankers Association reported that mortgage applications for the week ended Aug. 9 decreased nearly 5% from the previous week.

No wonder the homebuilding sector has faltered. Consider the shares of two homebuilding bellwethers - Toll Brothers and Lennar . TOL ChartTOL data by YCharts

Lennar has plunged 24% since its 52-week high on May 20 of $44.40, and Toll Brothers has fallen about 20% from its 52-week high on May 22 at $39.24.

Some blame the stock market's malaise on "good news is bad news." For instance, new weekly unemployment claims were the lowest since 2007. That caused concern that the Fed will reduce its bond-buying program.

Give me a break! How about the millions who have stopped looking for jobs because the only ones readily available pay close to minimum wage, or how about the millions who are under-employed for the same reasons?