It's Not the End of the World

The Dow Jones Industrial Average gained 0.2% to close at 12,442.16 while the S&P 500 gained 0.2% to close at 1414.85. The tech-heavy Nasdaq Composite finished the day up 0.6% to close at 2459.33, boosted by further gains in Apple Computer(AAPL Quote).

Amid the media fuss over its new iPhone, Apple hit an all-time high Wednesday, up 4.9% after jumping over 8% Tuesday. Chipmakers Marvell Technology (MRVL Quote) and Nvidia (NVDA Quote) rallied by 5.8% and 4.9%, respectively, on speculation they are providing components of the iPhone, while industry leader Intel (INTC Quote) gained 2.3%. The Philadelphia Stock Exchange Semiconductor Index rose 1.8%.

A strong start to earnings season was another reason for optimism Wednesday. Alcoa(AA Quote) beat estimates after the closing bell Tuesday, sending its shares up 6%. After the close Wednesday, Genentech(DNA Quote) reported stronger than-expected earnings and solid guidance. Its shares were recently up 0.3% in after-hours trading.

Among other stocks in the news, Sears Holdings(SHLD Quote) jumped 3.5% after the company raised its earnings guidance for 2007.

M&A activity was also still bustling. U.S. Airways'(LCC Quote) shares jumped 1.8% on news that the company increased its bid for Delta Air Lines(DALRQ.PK Quote) to $10.3 billion from $8.5 billion. Delta's shares surged 7.7% while AMR (AMR Quote) rose 5.9% amid speculation of further industry consolidation. The Amex Airline Index climbed 2.7%.

Exaggerated Reports of Economy's Death

The recent weakness in commodities and related stocks is exaggerated due to investors' jitters about the economy and a hard landing, says Hogan. And the move could reverse quickly.