TheStreet.com: The Market Story: Stocks Tick Up on Light Volume

Stocks Tick Up on Light Volume

Sung Moss
11/11/2009 5:55 PM EST

NEW YORK (TheStreet) -- Stocks closed higher Wednesday on thin volume, with transports, homebuilders, financials and chip stocks setting the pace.

The Dow Jones Industrial Average finished up 44 points, or 0.4%, to 10,291. The S&P 500 advanced 6 points, or 0.5%, to close at just under 1099, while the Nasdaq added 16 points, or 0.7%, to 2167.

Hewlett-Packard (HPQ:NYSE) announced plans to buy 3Com (COMS:NYSE) for $2.7 billion and raised its 2010 outlook after the closing bell. H-P shares traded flat after the closing bell, while 3Com jumped 35%.

Applied Materials (AMAT:NYSE) also beat forecasts in posting a 40% drop in profit and said would slash up to 1,500 jobs, 12% of its workforce.

Several analysts agreed the lack of market-driving data, coupled with another earnings season in the books, left stocks adrift. No major U.S. economic reports were scheduled for release, and the U.S. bond market was closed for Veterans Day.

"You've got a holiday, said Jerry Paul, chief investment officer at Essential Investment Partners. "I'm not sure that there's a key factor that's driving the market other than momentum we've been under and the technical levels we've been approaching. At some point in time, we're likely to get profit-taking."

The 1100 level of technical resistance on the S&P 500 was tested throughout the day.

"Obviously, that's where we peaked a few weeks ago," says Ryan Detrick, senior technical strategist at Schaffer's Investment Research. "Now we're right up against it. Given the fact that we've been up a few days in a row, that's an area where you'll find a pause. So, 1100 is a big deal."

The Dow Jones Transportation Average went higher by 1.8%, led by jumps from Con-Way (CNW:NYSE) and Southwest Airlines (LUV:NYSE) .

United Parcel Service (UPS:NYSE) closed higher by 2.2% after expressing optimism about demand during the holiday season.

The financial and chipmaker sectors were some of the bigger gainers today, as the KBW Bank Index and the Philadelphia Semiconductor Index rose 1.1% and 1.4% each. Bank of America (BAC:NYSE) and Intel (INTC:NYSE) helped lead the Dow higher, gaining 2.5% and 1.7%, respectively.

Housing-related stocks swelled today, with the Philadelphia Housing Sector Index going higher by 3.7%. Toll Brothers (TOL:NYSE) announced preliminary fourth-quarter results, saying signed new contracts climbed 42% from last year. Toll Brothers shares gained over 16%.

Home Depot (HD:NYSE) , another leader on the Dow, gained 1.8%.

Energy shares lagged, with the Amex Oil Index and the Dow Jones Utilities Average down 0.3% each.

U.S. Treasury Secretary Timothy Geithner expressed support for a strong dollar, saying "that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar," according to news reports.

With the dollar strengthening late, crude oil finished 23 cents higher at $79.28 a barrel, but off its session highs.

Gold, which surged to record highs earlier in the session, gained $12.10 to settle at $1,114.60 an ounce. Related equities were also receiving a boost, as the Philadelphia Gold and Silver Index also added about 1%.

Markets were also lifted in the morning from news out of Asia. China showed increasing signs of economic growth. Retail sales jumped 16.2% in October from a year ago, industrial production jumped 16.1%, and its export slump eased helped by steel.

Orders for machinery in Japan also showed monthly growth at 10.5% in September.

Hong Kong's Hang Seng advanced 1.6%, and Japan's Nikkei held flat. In Europe, the FTSE in London gained 0.7%, as the DAX in Frankfurt added 1%.

Macy's (M:NYSE) reported a smaller loss in the third quarter, as sales dipped 3.9% to $5.28 billion. The retailer's loss, after excluding items, came to 6 cents a share vs. an anticipated loss at 7 cents a share.

The Wall Street Journal reported that American International Group (AIG:NYSE) CEO Robert Benmosche is thinking of quitting over frustration with the government's oversight of pay practices. In the afternoon, Benmosche said he remains "totally committed to leading AIG through its challenges," according to an internal memo.

--Written by Sung Moss in New York.