What’s Giving Bulls Reason To Cheer
Price
action was narrow and choppy in early trading, though a late-afternoon
rally launched the major indexes well into positive territory at the close.
The
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed +4.56% at
7538.79. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed +4.00% at 847.92. The
Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed +3.55% at 1213.78.
The markets managed to shake
off a negative report from the ISM, giving the Bulls reason to cheer for a
change. A potential near-term low has also been highlighted by Carolyn
Boroden, though the duration of such a move remains unclear.
The biggest gainers from
today’s session were chemicals
(
$CEX |
Quote |
Chart |
News |
PowerRating), +7.36%, computer
technology
(
$XCI |
Quote |
Chart |
News |
PowerRating), +5.56%, telecoms
(
$XTC |
Quote |
Chart |
News |
PowerRating), +5.29%, and insurance
(
$IUX |
Quote |
Chart |
News |
PowerRating), +4.91%.
The biggest losers were
in gold and silver
(
$XAU |
Quote |
Chart |
News |
PowerRating), -3.03%, and healthcare
(
$RXH |
Quote |
Chart |
News |
PowerRating),
-0.37%.
The Semiconductor Index
(
$SOX |
Quote |
Chart |
News |
PowerRating),
+4.89% at 249.91, and the Broker Dealer Index
(
$XBD |
Quote |
Chart |
News |
PowerRating), +2.98% at
374.59, both closed a the top of their daily ranges, in Haggerty 1-2-3 setups.
U.S. Treasury Bonds
closed down ’30 at 113 ’10.
In economic news, The Institute
of Supply Management dropped to 49.5% for September, from August’s reading
of 50.5%. Levels below 50% indicate contraction. Economists were looking for a
reading of 50.4%.
Volume was slightly above
average at 1,684,124,000
on the NYSE, and 1,681,452,000
on the Nasdaq.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.21, and up
volume over down volume by a 3.95 ratio. Nasdaq advancing issues over declining
issues came in at 1.25, and up volume beat down volume by a 3.06 ratio.
The
VIX
was -4.44 at 40.13. The TRIN
was -1.18 at 0.56.
Leading the Dow higher were Du
Pont
(
DD |
Quote |
Chart |
News |
PowerRating), +9.86% at 39.63, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), +7.51% at 20.75, General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), +6.28% at 26.20, 3M Company
(
MMM |
Quote |
Chart |
News |
PowerRating) +5.73% at
116.28, Micorsoft Corp.
(
MSFT |
Quote |
Chart |
News |
PowerRating), _5.69% at 46.23, and Boeing
(
BA |
Quote |
Chart |
News |
PowerRating),
+5.47% at 36.00.
Stocks in the news:
Computer hardware maker Dell
Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), +4.80% at 24.64, was upgraded by Bank of America to
“buy” from “market perform” with a 12-month price target of
$30.
Online retailer Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating), +6.40% at 16.95, had its third-quarter earnings expectations raised
by Bear Stearns by 1 cent per share, and a new price target of $19.
Financial services company Fannie
Mae
(
FNM |
Quote |
Chart |
News |
PowerRating), +9.53% at 89.85, shot up after the company announced that its
duration gap (a measure of the difference between the maturity of the company’s
assets and liabilities) had increased due to long-term rates, ignitingÂ
mortgage prepayments.
Biotech company Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating), +9.55% at 89.85, raised its earnings guidance, with profits expected
to exceed previous a previous estimate of $0.57 by 30%. The stock was also a
member of TM’s  Momentum
List.
Electric utilities company
TXU Corp.
(
TXU |
Quote |
Chart |
News |
PowerRating), -4.72% at 39.74, was downgraded by Merrill Lynch
to “neutral” from “buy” with new guidance of $0.20 per
share.
Drug maker Wyeth
(
WYE |
Quote |
Chart |
News |
PowerRating),
+5.06% at 33.41, was upgraded by Raymond James to “strong buy” from
“market perform” due to a lack of patent expirations and sales growth.
Also in the drug making business,
Alcon
(
ACL |
Quote |
Chart |
News |
PowerRating), -3.48% at 37.40, was downgraded by Bank of America to
“buy” from “strong “buy” based on the belief that
additional multiple expansion will be difficult in the near-term.
One of the day’s big losers was
Aeropostale
(
ARO |
Quote |
Chart |
News |
PowerRating), -57.79% at 6.50, as the company reduced its fiscal
forecasts for the third and fourth quarters.
Oil services company Nabors
Industries
(
NBR |
Quote |
Chart |
News |
PowerRating), -1.83% at 32.15, warned that its third-quarter
earnings will fall short of expectations due to the fact that North American Gas
related activity has yet to materialize.
Retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating),
+1.62% at 30.00, was downgraded by Salomon Smith Barney to “in-line”
from “outperform.”
Data storage company EMC
Corp.
(
EMC |
Quote |
Chart |
News |
PowerRating), +6.78% at 4.88, rose after an upgrade from Lehman Brothers
to “overweight” from “equal weight” based on valuation.