YAHOO [BRIEFING.COM]: The
broader equity market logged its fourth straight gain amid encouraging
corporate headlines, continued weakness in the U.S. dollar, and a
better-than-feared weekly jobless claims report. However, technical resistance
capped the move by stocks.
Dow component Alcoa (AA 14.35, +0.15) kicked off earnings
season last evening in positive fashion. The company brought in an adjusted
$0.04 per share, which was considerably better than the loss of $0.09 per share
that had been widely expected. Alcoa went on to issue a relatively upbeat
outlook. Shares of AA started the session at fresh highs for 2009, but the
stock drifted off of its opening levels for the rest of the session.
Still, Alcoa's report was
enough to set the materials sector on a strong course. The sector finished 2.0%
higher.
Materials stocks were also
helped by higher commodity prices, which were bolstered by a weaker dollar.
With the greenback shedding 0.6% against a basket of major foreign currencies,
the CRB Commodity Index climbed 2.1%.
Once again, gold was a
standout among commodities. The yellow metal finished 1.1% higher at $1056.20
per ounce, but had been as high as $1062.70 per ounce, which marks a new record
high.
Oil futures also garnered
strong interest. Crude contracts settled with oil priced 3.0% higher at $71.68
per barrel. Oil's enviable gain helped lift oil and gas drillers 4.3% and oil
and gas explorers 3.9%, which gave the broader energy sector a 2.3% gain,
better than any other major sector.
Retailers were also among the
session's better performers. As a group, they finished with a 1.8% gain. The
advance followed a flurry of same-store sales results for September. Though
many companies continued to see softer sales results, the numbers showed an
improvement from previous months and were also better than expected. JCPenney (JCP 35.16, +0.25) and Kohl's (KSS 59.97, +1.43) went so far as to raise
their outlook in the wake of their monthly sales results.
The broader market was also
helped by news that initial claims for the week ending October 3 fell 33,000 to
521,000, which is below the 540,000 that was widely expected. Meanwhile,
continuing claims fell 72,000 to 6.04 million, which is below the consensus
call of 6.11 million. Though the numbers were better than feared, there is cold
comfort in knowing that initial claims remain at uncomfortable levels and
continuing claims have come down as a result of expired jobless benefits.
Though the broader market
traded with strength for the entire session, it did encounter some resistance
as the S&P 500 attempted to push through levels in-line with its 2009
closing highs. Failure to push through that mark coincided with the dollar's
move off of its session low, which was marked when the Dollar Index was down
0.8%, and left stocks to pare some of their gains in afternoon trading.
The pullback was particularly
hurtful to the financial sector, which had been up as much as 1.3% before
finishing with a modest 0.2% gain. Regional banks weighed on the sector after
several were assigned a Sell rating by analysts at UBS. Regional banks closed
with a 1.1% loss.
Health care stocks also
underperformed. The sector settled with a fractional loss amid weakness in
managed care stocks (-4.6%), which were pressured on comments regarding
possible windfall taxes for insurers.
Telecom stocks were the worst
performers for the second straight session, however. The sector surrendered
0.8%.
Treasuries encountered some of
their own weakness following an auction of 30-year Bonds. The auction produced
a bid-to-cover ratio of roughly 2.4 and a high yield of 4.0%. The 30-year Bond
responded to the auction by surrendering more than one full point, while the
benchmark 10-year Note dropped some 18 ticks, which put its yield back around
3.25%.
Advancing Sectors: Energy (+2.3%), Materials (+2.0%),
Consumer Discretionary (+1.5%), Industrials (+1.2%), Consumer Staples
(+0.6%), Tech (+0.4%), Utilities (+0.2%), Financials (+0.2%)
Declining Sectors: Telecom (-0.8%), Health Care (-0.1%)DJ30
+61.29 NASDAQ +13.60 NQ100 +0.4% R2K +0.9% SP400 +1.4% SP500 +7.90 NASDAQ
Adv/Vol/Dec 1535/2.42 bln/1131 NYSE Adv/Vol/Dec 2203/1.28 bln/817