Stocks Surge, Home Sales Strong, Rate Increase Advised

• December 1, 2009
• David Goodboy

Stocks shrugged off suggestions from the Fed of a pending future rate increase by surging higher on this first trading day of the month. Strong home sales surprised even the most bullish economist with a 3.7% monthly gain despite a falling U.S. dollar. Good news from China’s manufacturing sector added to the optimistic tone of the day. The DJIA advanced +126.74 to 10471.58, the tech heavy Nasdaq marched higher by +31.21 to 2175.81 and the broad based S&P 500 powered ahead by +13.23 to 1108.86.

Staples
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PowerRating): The giant office supply retail firm advanced 4.85% or $1.13 to $24.45/share after beating 3rd quarter estimates.

Boston Private Financial Holdings
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PowerRating): Obtained an upgrade to “buy” at Suntrust Robinson, sending shares higher by 13.01% or 61 cents to $5.30.

American International Group
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PowerRating): Restructured $25 billion in Federal debt bringing in the bulls climbing 8.77% or $2.49 to $30.97/share.

Guess?
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PowerRating): Added 12.96% or $4.80 to $41.85/share upon forecasting a 2010 profit beating estimates.

Gold advanced $17.90 to $1200.00, oil added $1.09 to $78.28 and the VIX index collapsed 10.40% to 21.96.

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Market Snapshot

Dow +126.74 10471.58 NASDAQ +31.21 2175.81 S&P 500 +13.23 1108.86

Economic News

Chicago PMI (Nov): Consensus: 53.3, Prior: 54.2 Construction Spending (Oct): Consensus: -0.4, Prior: 0.8% ISM Index (Nov): Consensus: 54.8, Prior: 55.7 Pending Home Sales (Oct): Consensus: -0.5, Prior: 6.1% Auto Sales (Nov): Consensus: NA, Prior: NA Truck Sales (Nov): Consensus: NA, Prior: NA Challenger Job Cuts (Nov): Consensus: NA, Prior: -50.7% ADP Employment Report (Nov): Consensus: -148K, Prior: -203K Crude Inventories (11/27): Consensus: NA, Prior: 1.02M Fed Beige Book: Consensus: NA, Prior: NA Initial Claims (11/28): Consensus: 483K, Prior: 466K Continuing Claims (11/21): Consensus: 5517K, Prior: 5423K Productivity-Rev. (Q3): Consensus: 8.5%, Prior: 9.5% Employment Cost Index (Q4): Consensus: NA, Prior: 0.4% ISM Services (Nov): Consensus: 51.5, Prior: 50.6 Nonfarm Payrolls (Nov): Consensus: -114K, Prior: -190K Unemployment Rate (Nov): Consensus: 10.2%, Prior: 10.2% Average Workweek (Nov): Consensus: 33.1, Prior: 33.0 Hourly Earnings (Nov): Consensus: 0.2%, Prior: 0.3% Factory Orders (Oct): Consensus: 0.1%, Prior: 0.9%