YAHOO [BRIEFING.COM]: Strong
earnings from a couple of industry bellwethers and a weaker U.S. dollar brought
about a concerted buying effort that sent all three major indices to new
2009 highs. Stocks lost a bit of their upward momentum as they headed into the
close, but the Dow was still able to settle above 10,000 for the first time in
one year.
Stocks traded solidly higher
in broad-based fashion for the entire session. Their advance came on the heels
of better-than-expected third quarter earnings from chipmaker Intel (INTC 20.83, +0.34) and diversified
financial services outfit JPMorgan Chase (JPM 47.16, +1.50). For its part, Intel
brought in $0.33 per share and also issued upside revenue guidance. JPMorgan
brought in $0.82 per share for its latest quarter, even though it added $2.0
billion to consumer credit reserves, and said during its conference call that
it hopes to raise its dividend back to $0.75 per share in the first half of
2010.
JPMorgan's report sent the
broader financial sector to a 3.4% gain, which was better than any other sector
this session. However, the bank's report set a high bar for peers like Bank of America (BAC 18.59, +0.78), which reports Friday.
Pharmaceuticals company Abbott Labs (ABT 51.20, +1.55) announced
better-than-expected third quarter adjusted earnings of its own by bringing in
$0.92 per share and went on to raise its fiscal 2009 guidance. That helped
pharmaceutical stocks overcome continued weakness in shares of Johnson & Johnson (JNJ 60.55, -0.46) and drive the health
care sector 1.5% higher.
Rail company CSX (CSX 47.06, +2.78) was one of this
session's best performers following its upside earnings surprise of $0.74 per
share. Fellow rail stocks shared in its strength and sent the industrial sector
to a 2.6% gain, second only to financials.
Telecom was the only sector
that failed to post a gain. Though its loss was fractional, this session marked
the fifth time in the past six sessions that telecom underperformed.
Still, broad-based buying sent
stocks to fresh highs for 2009. Since registering March lows, the Dow has
climbed roughly 55%, the S&P 500 has jumped approximately 64%, and the
Nasdaq has surged almost 72%.
Continued weakness in the U.S.
dollar sent the Dollar Index down 0.7%. It registered new 52-week lows in
afternoon trade. Though the dollar wasn't in focus this session, its doldrums
continue to provide a boon for the stock market.
The positive mood among
participants this session was reinforced by pleasing September retail sales
data, which showed a softer-than-expected decline of 1.5%. Excluding autos,
retail sales increased a better-than-expected 0.5%.
Import prices for September
were up 0.1% month-over-month, which is largely in-line with what had been
expected, while business inventories for August fell a sharper-than-expected
1.5%. Those reports were overshadowed, though.
In other economic news,
minutes from the September 23 FOMC meeting indicated that policymakers feel
that the economic outlook has improved and that job losses are slowing. In
turn, most members have upwardly revised economic projections, though overall
activity is still quite weak.
The minutes supported the
stock market's bullish trend, but Treasuries didn't respond so well to them.
Comments that increasing the scale of asset purchases could aid in the
economy's recovery caused the benchmark 10-year Note to drop roughly 20
ticks and the 30-year Bond to surrender more than one full point.
Advancing Sectors: Financials (+3.4%), Industrials
(+2.6%), Materials (+2.0%), Energy (+1.2%), Consumer Discretionary (+1.5%),
Tech (+1.5%), Health Care (+1.5%), Consumer Staples (+0.5%), Utilities (+0.4%)
Declining Sectors: (None)
Neutral: Telecom DJ30 +144.80 NASDAQ +32.34 NQ100 +1.4% R2K +2.0%
SP400 +1.8% SP500 +18.83 NASDAQ Adv/Vol/Dec 2048/2.39 bln/698 NYSE Adv/Vol/Dec
2278/1.35 bln/769