Rally! Plus, Disappointing Phase III Study
Stocks
rallied Wednesday — the first day of the
fourth quarter
— even in the face of disappointing economic data.
The Nasdaq gained 2.5%, the Dow 2.1%, and
the S&P 2.2%.
It was the biggest one-day rally in the Dow since June 16. Both construction spending
and the ISM Manufacturing Index came in below expectations. Consistent with
yesterday’s Chicago PMI, the ISM Index expanded for the third straight month,
but at a slower-than-expected pace. Helping to
boost the markets today, diversified manufacturer 3M
(
MMM |
Quote |
Chart |
News |
PowerRating) raised its
full-year outlook from between $5.65 to $5.85 a share to $5.75 to $5.90 a share.
Meanwhile, Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating) received a three-year contract worth up to
$500 million from the US Army.
On a historical note, October
1, 2002 the Dow gained +346, only to be followed by a four-day selloff.
The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) rallied +194.14 to 9469.20. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
rose +22.00 to 1018.00. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) jumped +45.31 to
1832.25.
The day’s leading sectors were
Homebuilders
(
$HGX.X |
Quote |
Chart |
News |
PowerRating), +4.23%, Disk Drives
(
$DDX.X |
Quote |
Chart |
News |
PowerRating),
+3.64%, Retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), +3.01%, Brokers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating)
+2.96%, and Insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating),
+2.73%.
In economic news,
Construction Spending in August rose by 0.2% or half of what was expected.
The ISM Manufacturing Index in September declined to 53.7 form August’s
54.7. Economists were looking for a reading of 54.5.
The 10-year U.S. Note
N/C at 114 150.
The dollar was -0.53 at
92.32.
Gold was +0.30 at 385.70.
Crude Oil was +0.26 at
29.39.
Volume was
1,505,204,000 on
the NYSE, and 1,804,536,000 on the Nasdaq.
Market breadth was positive,
with NYSE advancing issues over declining issues by 4.46 and up over down volume
by 5.85; Nasdaq advancing issues over declining issues at 2.17, and up volume
over down volume at 2.26.
Top Dow stocks were:
United Technology
(
UTX |
Quote |
Chart |
News |
PowerRating), +2.60 at 79.88, Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating),
+1.05 at 32.90, Walt Disney [DIS|DIS],
+0.66 at 20.83, 3M
(
MMM |
Quote |
Chart |
News |
PowerRating),
+1.83 at 70.90, and Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), +2.50 at 71.34.
Stocks in the news:
After the close,
Netflix
(
NFLX |
Quote |
Chart |
News |
PowerRating) announced Q3
subscribers were up 74%. Dana Corp
(
DCN |
Quote |
Chart |
News |
PowerRating) said
it is planning a joint venture with Dongfeng Motor Co, a Chinese company. The
50/50 joint-venture will manufacture and assemble commercial-vehicle axles and
components in China. Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating) said it has stopped development of dexloxiglumide, for irritable bowel
syndrome, after disappointing pivotal-stage studies. The company said its
decision was based on the outcome of two 12-week Phase III clinical studies.
UTStarcom
(
UTSI |
Quote |
Chart |
News |
PowerRating) said it will exceed its
goals, citing stronger-than-expected growth in China. The company also raised
fourth-quarter targets.
Computer graphics card maker
ATI Technologies
(
ATYT |
Quote |
Chart |
News |
PowerRating) rose 6.4% after the company announced
that it has entered into a cross-licensing pact with Cirrus Logic
(
CRUS |
Quote |
Chart |
News |
PowerRating)
and has settled all outstanding lawsuits with Cirrus. Under the terms, ATI will
pay Cirrus $9 million and Cirrus will give ATI a portion of its patent
portfolio related to its graphics products group.
Drug maker Eli Lilly
(
LLY |
Quote |
Chart |
News |
PowerRating)
gained 6% after the company received word from the FDA that it would not
require new clinical trials of its experimental anti-depressant drug, Cymbalta.
However the FDA is requiring the company to take care of some quality control
issues at two of its manufacturing plants.
Immucor
(
BLUD |
Quote |
Chart |
News |
PowerRating)
added 1.95 after reporting a 17.39% rise in quarterly earnings. Late
yesterday the company reported first-quarter earnings of 27 cents a share
compared to 23 cents a share in the year-ago quarter. Revenues rose to $27.3
million from $23.3 million. The results were in line with estimates. Looking
ahead, the company sees fiscal 2004 revenues and earnings of $17.1 million to
$18.5 million and $1.20 to $1.28 a share. Current consensus estimates are
calling for revenues of $14.4 million and earnings of $1.07 a share.
Labranche
(
LAB |
Quote |
Chart |
News |
PowerRating) slid
8% after the market-making firm warned that its third-quarter results
would be 3 to 5 cents lower than previous estimates. The company cited a
“depressed equity trading environment”. Separately NYSE officials are still
looking into its trading practices. The company said that investigators are
looking at a “very small fraction of its trading revenues.”
If you have any comments or
questions, please feel free to email me.
bricew@tradingmarkets.com