YAHOO ;BRIEFING.COM]: Despite
stumbling in the early going, stocks worked their way higher to log their
seventh gain in eight sessions as buyers chased materials stocks and basic
commodities.
The major indices started the
session in higher ground with help from the August Producer Price Index, which
came in with a greater-than-expected 1.7% month-over-month increase, and a
stronger-than-expected 0.2% month-over-month increase in core prices. The
Empire State Manufacturing Survey for September climbed more than expected to
18.9, which is a new best for 2009, but the advance retail sales report for
August was the headliner after it made the sharpest monthly jump in more
than three years by climbing a better-than-expected 2.7%. Sales less autos were
also better than expected; they increased 1.1%.
Despite the overall positive
nature of the data, stocks ran into a flurry of selling pressure midmorning.
However, the dip was shallow and short-lived, which led to some short covering
that complemented a broader market rebound.
Participants paid little
attention to news that July business inventories fell a slightly
steeper-than-expected 1.0% and Fed Chairman Bernanke's statement that the
recession is very likely over.
Materials stocks attracted
plenty of interest, however. The sector climbed 2.3% to finish with the best
gains of any major sector. Steel stocks (+3.0%) were the sector's primary
leaders, but a run up in commodities prices helped stir interest in the rest of
the sector as well.
Strong gains among commodities
helped the CRB Commodity Index climb 2.2%, which is its best single-session
percentage advance in more than one month. The move was helped along by a 3.0%
gain in crude oil prices, which settled at $70.93 per barrel. Gold also
continued to garner support -- it finished the session 0.5% higher at
$1006.30 per ounce. The case for commodities was partly helped by continued
deterioration in the U.S. dollar, which took the Dollar Index down to fresh
11-month lows before easing up to settle with a 0.2% loss.
Health care stocks closed 0.8%
lower. They were the worst performing sector in the S&P 500. However,
consumer staples stocks (-0.6%) weren't far behind, due to weakness in Kroger
(KR 20.46, -1.65). The grocer disappointed by posting an earnings miss
and lowered guidance.
Best Buy (BBY 38.32, -2.09) also posted
worse-than-expected earnings, but it noted that it successfully captured a
record market share increase last quarter.
Citigroup (C 4.12, -0.40) was a drag on the
financial sector, which finished with a 0.1% gain. Reports indicated that the
company is reportedly considering raising capital through a share issuance to
help it reduce the government's stake. Conversely, Regions Financial
(RF 6.06, +0.55) won favor after its CEO said at a Barclays conference that the
company absolutely will not need to raise additional capital.
Trading volume was solid as
1.5 billion shares exchanged hands on the NYSE. Longer-term averages stand
closer to 1.4 billion shares.DJ30 +56.61 NASDAQ +10.86 NQ100 +0.3% R2K +0.8%
SP400 +0.8% SP500 +3.29 NASDAQ Adv/Vol/Dec 1566/2.39 bln/1098 NYSE Adv/Vol/Dec
2142/1.50 bln/893