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The major indexes put in a positive performance for the day as price action closed out at the top of its daily range. The Dow and S&P 500 closed right above their 200-day simple moving averages as the market leading broker/dealers took the top slot for biggest gainers. With earnings now the main focus of traders, today's action showed encouraging moves from financial companies Citigroup and Bank of America, who both easily beat expectations.
However, this holiday week is far from over as we have a series of earnings announcements scheduled from Dow companies including IBM, which after the bell announced posted a penny below expectations, though beat on revenue. IBM is always a potential market mover, and will likely have a heavy influence on tomorrow's open.
Also after the close today we have (RMBS | Quote | Chart | News | PowerRating), (NVLS | Quote | Chart | News | PowerRating), and (CGNX | Quote | Chart | News | PowerRating) announcing earnings.
The Dow Jones Industrial Average ($INDU.X | Quote | Chart | News | PowerRating) closed +1.80% at 8,351.10. The S&P 500 ($SPX.X | Quote | Chart | News | PowerRating) closed +1.94% at 885.23. The Nasdaq ($COMPQ | Quote | Chart | News | PowerRating) closed +1.92% at 1,384.95.
The day's big winners were broker/dealers ($XBD.X | Quote | Chart | News | PowerRating), +3.28%, telecoms ($IXTC.X | Quote | Chart | News | PowerRating), +2.68%, and semiconductors ($SOX.X | Quote | Chart | News | PowerRating), +2.55%.
The only losing sectors were gold and silver ($XAU.X | Quote | Chart | News | PowerRating), -0.41%, and oil service ($OSX.X | Quote | Chart | News | PowerRating), -0.39%.
In economic news, business inventories rose 0.6% vs. expectations of a 0.2% gain.
The Ten Year Note was -110 at 113 250.
The US dollar was -0.25 at 100.31.
Volume was well below average, with the NYSE coming in at 1,088,567,000 and the Nasdaq at 1,153,030,000.
Market breadth was positive, with NYSE advancing issues over declining issues by a ratio of 2.78, and up volume over down volume by a 6.32 ratio. Nasdaq advancing issues over declining issues came in at 1.88, and up volume beat down volume by a 3.75 ratio.
The VIX was -1.80 at 26.47. The TRIN was -0.58 at 0.42
.Leading the Dow were:
Hewlett Packard (HPQ | Quote | Chart | News | PowerRating), +3.85% at 15.89, JP Morgan (JPM | Quote | Chart | News | PowerRating), +3.71% at 26.54, General Motors (GM | Quote | Chart | News | PowerRating), +3.70% at 36.12, Alcoa (AA | Quote | Chart | News | PowerRating), +3.61% at 22.05, Honeywell (HON | Quote | Chart | News | PowerRating), +3.51% at 22.37, and Boeing (BA | Quote | Chart | News | PowerRating), +2.94% at 27.25.
Stocks in the news:
Money Center Banks Citigroup Inc. (C | Quote | Chart | News | PowerRating), +2.89% at 38.43, beat its earnings expectations by $0.02 with profits of $0.79 per share. And, Bank of America (BAC | Quote | Chart | News | PowerRating), +0.92% at 72.00, beat its first-quarter earnings expectations by $0.11 with profits of $1.48 per share.
Also in the money center bank biz, JP Morgan (JPM | Quote | Chart | News | PowerRating), +3.71% at 26.54, was the subject of a positive Wall Street Journal article which claims no current news on the stock looks good, given the company's recent setbacks.
Financial services company Fannie Mae (FNM | Quote | Chart | News | PowerRating), +3.59% at 71.49, beat its first-quarter earnings by $0.10 with profits of $1.84 per share.
Internet stocks made the cover of Barron's over the weekend in an article which highlighted Yahoo! (YHOO | Quote | Chart | News | PowerRating), -0.32% at 24.35, Amazon.com [AMZN | Quote | Chart | News | PowerRating]AMZN], -2.71% at 25.05, and eBay (EBAY | Quote | Chart | News | PowerRating), -0.62% at 87.74, as potentially overvalued.
In the retail sector Merrill Lynch downgraded to "neutral" from "buy" the following: Abercrombie and Fitch (ANF | Quote | Chart | News | PowerRating), -0.57% at 31.22, Coach (COH | Quote | Chart | News | PowerRating), -0.20% at 38.42, Gap (GPS | Quote | Chart | News | PowerRating),+0.24% at 16.24, Ross Stores (ROST | Quote | Chart | News | PowerRating), +0.08% at 37.40, and TJ Maxx (TJX | Quote | Chart | News | PowerRating), -2.37% at 18.46.
Drug maker Osip Pharmaceuticals (OSIP | Quote | Chart | News | PowerRating), +10.39% at 16.89, was upgraded by Merrill Lynch to "buy" from "neutral".
Capital goods company Eaton (ETN | Quote | Chart | News | PowerRating), +5.25% at 76.10, beat its first-quarter earnings expectations by $0.11 with profits of $0.95 per share. The company has also guided higher for the second-quarter.
Also in the capital goods business, Cummins (CUM | Quote | Chart | News | PowerRating), +1.07% at 25.47, lowered its earnings guidance, and now expects to take a loss between $0.85-0.95 per share vs. a consensus for a loss of $0.57.
Conglomerate Temple-Inland (TIN | Quote | Chart | News | PowerRating), +4.08% at 41.56, was the subject of a positive Barron's article which claimed the stock is poised to go higher if the company were to sell its savings and loan bank, Guaranty.
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