The Bad News Is…Good News
They were buying the pullbacks
today, as stocks
rose on news that Microsoft had negotiated an agreement with the Justice
Department to settle the protracted antitrust suit. The word is that the
agreement will favor Microsoft, and broad-based buying followed all session
long. The rally happened despite more bad economic data: The NAPM Index fell to 39.8
— down from 47 the prior month and at its lowest level since 1991 — and Initial
claims fell by 10,000, but still are near 18-year highs.
The Dow gained 185.78 (2%) to close at
9260.92. Advancers led decliners by a 2:1 margin.
The Nasdaq closed at its highs at 1746.23, up
56.03 (3.32%).
The S&P gained 23.73 (6.7%) to 1083.51.
Today’s action has the S&P bumping up against the 50-day moving average
Semiconductors
(
$SOX.S |
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PowerRating) led the way, with
15 out of the 16 stocks in the index gaining. Industry
reports indicate semiconductor sales’ decline has slowed for the third straight
month.
Thirty-year treasuries traded at historic-low yields
after the Treasury announced yesterday that the bonds, traded since 1977, would
be discontinued.
UAL
(
UAL |
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PowerRating) reported a Q3 loss of
$10/share, the largest in the company’s 75-year history. The loss, over $1
billion, was slightly narrower than expectations. UAL lost .30 to 13.10. Delta Air Lines
(
DAL |
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PowerRating) also reported a
loss, but beat slightly, and said that losses from Sept. 11 would total $400
million. DAL rose .80 to 23.66.
Enron
(
ENE |
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PowerRating) retained counsel as the SEC
widens its third-party investigation of the company. ENE has fallen in 11 of the
past 12 days, losing 1.91 today, closing at 11.99.
No-interest loan promotions succeeded in boosting
car sales; both General Motors
(
GM |
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PowerRating) and Ford
(
F |
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PowerRating) car sales were up by a
third. GM rose .98 to close at 42.30. Ford
gained .32, closing at 16.37.
Career Education
(
CECO |
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PowerRating) rose as the company
reported net income rose 78%. CECO closed at 29.68, up 3.61.
Washington Mutual
(
WM |
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PowerRating) fell to a 52-week low, on
concerns that mortgage refinancing will be with fixed-rate loans. Last quarter,
over 40% of the company’s loans were adjustable rate. WM closed at 28.56, down
1.63. Dime Bancorp
(
DME |
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PowerRating), also in the mortgage business, fell 1.19 to 32.69.
Today is Nov. 1. The November – April
period is historically the best-performing time of the year. But first, look for
the unemployment number tomorrow.