Surprises Fuel Bulls’ Fire
The major indexes posted
impressive gains to the upside, as an earnings surprise from IBM lit a spark
under the Bulls’ fire. Price action gapped up off the open, though gradually
slid down throughout the session, as a mixed batch of economic data failed to
bring in more buying pressure. Additional earnings surprises from Dow components
also helped to boost sentiment, and after the bell, software giant Microsoft
announced earnings that easily beat expectations, which will be a potential
market mover tomorrow.
The
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed +2.97%
at 8274.89. The S&P 500
(
$SPX.X |
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Chart |
News |
PowerRating) closed
+2.22%
at 879.18. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed +3.22%
at 1,272.20.
The day’s biggest gains were in
semiconductors
(
$SOX |
Quote |
Chart |
News |
PowerRating), +8.65%, airlines
(
$XAL |
Quote |
Chart |
News |
PowerRating), +7.40%, computer
hardware
(
$GHA |
Quote |
Chart |
News |
PowerRating), +6.14%, software
(
$GSO |
Quote |
Chart |
News |
PowerRating), +5.37%, broker/dealers
(
$XBD |
Quote |
Chart |
News |
PowerRating), +5.37%, and networking
(
$NWX |
Quote |
Chart |
News |
PowerRating), +5.31%.
The biggest losses were in healthcare
(
$RXH |
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Chart |
News |
PowerRating), -1.33%, and retail
(
$RLX |
Quote |
Chart |
News |
PowerRating), -1.32%.
In economic news, building
permits came in at 1.727 vs. an expected 1.668 million, housing starts
beat expectations with 1.843 million vs. an expected 1.627 million, initial
jobless claims were at 411,000 vs. an expected 398,000, capacity
utilization was listed at 75.9% vs. an expected 76%, industrial
production was at -0.1% vs. an expected 0.1%, and the Philadelphia Fed disappointed
with a reading of -13.1% vs. an expected -4%.
The 10-year U.S. Note
was -180 at 112 180.
The Dollar was +0.73 at
108.72.
Volume was average, at 1,724,192,000
on the NYSE, and 1,785,005,000
on the Nasdaq.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.25, and up
volume over down volume by a 2.49 ratio. Nasdaq advancing issues over declining
issues came in at 2.62, and up volume beat down volume by a 7.07 ratio.
The
VIX
was -1.81 at 40.16. The TRIN
was -0.96 at 0.90.
Leading the Dow:
International Business
Machines
(
IBM |
Quote |
Chart |
News |
PowerRating), +11.24% at 72.20, surprised analysts with profits of
$0.99 per share.
United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating),
+9.82% at 60.00, beat its third-quarter earnings estimates and announced that
they were on track to meet previous targets.
Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating),
+6.88% at 32.44, raised its third-quarter earnings outlook to $1.04 per
share vs. a previous estimate of $0.73 per share.
Also, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
+6.28% at 22.50, Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), +6.04% at 40.36, and American
Express
(
AXP |
Quote |
Chart |
News |
PowerRating), +5.90% at 34.10.
Stocks in the news:
Chip maker Advanced Micro
Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), +24.06% at 4.33, reported a drop in its third-quarter
revenue, though said its fourth-quarter will increase significantly.
Retailer Sears Roebuck
(
S |
Quote |
Chart |
News |
PowerRating),
-31.81% at 23.15, announced that its profit fell 28 percent in the
third-quarter, well below analysts estimates. The company also said it has
reduced its full year targets by 15 percent. The stock was a member of TM’s Implosion
List.
European mobile phone giant Nokia
(
NOK |
Quote |
Chart |
News |
PowerRating), +10.66% at 16.60, reported a rise in third-quarter earnings, with
demand for its handsets offsetting weakness in its networks division.
Tobacco company Phillip
Morris
(
MO |
Quote |
Chart |
News |
PowerRating), 4.40% at 40.30, announced earnings in line with estimates,
with a sharp increase in earnings after selling Miller Brewing.
Aerospace and defense
contractor General Dynamics
(
GD |
Quote |
Chart |
News |
PowerRating), – 0.92% at 77.87, was upgraded
by CSFB to “outperform” from “neutral” with a price target
of $90.
Defense stock Northrop
Grumman
(
NOC |
Quote |
Chart |
News |
PowerRating), -11.74% at 101.50, missed analysts’ expectations for the
third-quarter, and lowered its forecast for the rest of the year.
Oil services company
Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating), – 0.44% at 37.61, missed its third-quarter
earnings estimated by $0.02 with profits of $0.30 per share.
Data storage company QLogic
(
QLGC |
Quote |
Chart |
News |
PowerRating), +21.66%at 28.42, beat earnings expectations, and announced a
repurchase of $100 million in company stock.
Software company Symantec
(
SYMC |
Quote |
Chart |
News |
PowerRating), +10.40% at 39.26, beat its second-quarter earnings expectations by
$0.07 with profits of $0.38. The company also raised its third-quarter earnings
guidance by $0.03 to $0.38 per share.
Food company General Mills
(
GIS |
Quote |
Chart |
News |
PowerRating), -0.58% at 42.40, was the focus of negative comments from a Wall
Street Journal article which claims the company’s acquisition of Pillsbury has
yet to pay off, while slow growth, competition from rivals, and debt are
hindering profits.
Computer maker Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), +2.66% at 27.74, had its corporate credit rating raised by Standard
and Poor’s to reflect the company’s consistent profitability in extremely
competitive industry conditions.
Also in the computer making
business, Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating), -3.09% at 14.11, posted a heavy
loss for its fourth-quarter.
Airline Southwest Airlines
(
LUV |
Quote |
Chart |
News |
PowerRating), +8.87% at 14.48, said that its income fell 50 percent in the
third-quarter, though still managed to post a profit, unlike its competitors.