After some cozy economic news, investors and traders stormed the market in a feverish flurry to snap up stocks, sending major market barometers flying on heavy volume.
Stocks and bonds rallied after two key economic reports eased fears of rising inflation. Despite the good news on inflation, it didn't wipe out the expectations in the market that the
Federal Open Market Committee
will raise interest rates when it meets Nov. 16.
Major stock proxies were led by the
. Leading stocks higher were the interest-rate-sensitive financials, which built on the sharp gains they enjoyed
yesterday. The 30-year Treasury bond soared almost a full point.
The market: Join the discussion on
As for the above-mentioned economic news, the
Employment Cost Index
, a closely followed gauge of wage inflation, rose just 0.8% in the third quarter, less than the 0.9% consensus estimate as polled by
The other economic report, third-quarter
gross domestic product
, rose 4.8%, ahead of expectations for a 4.7% increase. While the growth number was a whopper, the implicit price deflator, the GDP report's measure of inflation, rose just 0.9%, less than the 1.2% estimate as polled by
, buoying investors' confidence on the outlook for inflation.
The old friend of the bull market -- strong economic growth and low inflation -- was back in the front of the market's mind. For today at least.
is slated to give a speech tonight in Boca Raton, Fla.
The S&P 500 hopped 45.73, or 3.5%, to 1342.44, closing just a hair under its intraday high of 1342.47. Not surprisingly, financials were the best-performing group in the S&P 500.
Dow Jones Industrial Average
surged 227.64, or 2.2%, to 10,622.53, led by
. Other notable winners in the Dow were
Procter & Gamble
Financial services sector indices posted huge gains. The
Philadelphia Stock Exchange/KBW Bank Index
hopped 6.3%; the
American Stock Exchange Broker/Dealer Index
soared 8.3%; the
Nasdaq Financial-100 Index
ballooned 3.9%; while the
S&P Insurance Index
wrote about the options action in financials in this afternoon's
Technology stocks, while they were outperformed by financials today, also made strong gains, particularly semiconductor and telecommunications issues.
Red Hots index expanded 9.5, or 4.3%, to 230.46. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. As of today, Sycamore Networks
has replaced Gadzoox Networks
in the Red Hots.
Nasdaq Composite Index
advanced 72.67, or 2.6%, to 2875.19.
Semiconductor and computer makers posted nice advances. The
Philadelphia Stock Exchange Semiconductor Index
rallied 5.9%, while the
Philadelphia Stock Exchange Computer Box Maker Index
Nasdaq Telecommunications Index
jumped 6.04, or 1.5%, to 422.81.
"It's hard to lose money on a day like this," said Scott Curtis, senior equity trader at
Brown Brothers Harriman
The trader highlighted the action in financials, noting that a number of them have hit or are trading near 52-week highs and that insurance stocks have been running since the announcement of the congressional deal on financial services reform legislation.
Curtis said today's economic data helped lessen the odds that the Fed will move beyond next month's meeting.
TheStreet.com Internet Sector
index gained 13.33, or 1.9%, to 719.82. Holding back the DOT's progress was a big tumble in
. Negative analyst actions on Amazon in the wake of its quarterly
results, which were released after yesterday's close, sparked a tumble in the stock.
As for Treasuries, the 30-year bond rallied 31/32 to 98 7/32, yielding 6.26%. Earlier this week, the yield on the benchmark Treasury touched 6.40%.
Chris Rupkey, senior financial economist at
Bank of Tokyo-Mitsubishi
, said Treasuries look "OK" for the next day or two, but the minute retail stops buying, dealers will begin to sell to cheapen up for the Treasury refunding early next month. He pointed out that the last four Treasury refundings "have been disasters" as it has taken much higher yields to sell. Overall, he's got a guarded outlook on the Treasuries.
As for next month's Fed meeting: "I'm with everyone else, I'm expecting a tightening," Rupkey said.
New York Stock Exchange
trading, 1.14 billion shares were exchanged -- the fifth-heaviest volume day ever -- while advancing stocks beat decliners 2,196 to 883. On the
Nasdaq Stock Market
, 1.24 billion shares traded -- making it the 10th-heaviest session -- while winners beat losers 2,365 to 1,643. New 52-week lows beat new highs 135 to 75 on the Big Board, while new highs edged new lows 137 to 129 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average
surged 94.41, or 3.2%, to 3013.11; the
Dow Jones Utility Average
rose 3.89, or 1.3%, to 306.26; and the
American Stock Exchange Composite Index
gained 7.24, or 0.9%, to 793.55.
Tuesday's Company Report
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
Mergers, acquisitions and joint ventures
Dura Automotive Systems
slipped 1/8 to 17 1/2 after it said it agreed to acquire the seat-adjusting systems business of
for $130 million in cash. Shares of Meritor climbed 1/8 to 17 3/4.
fell 2 11/16, or 5.2%, to 48 1/2 after it posted third-quarter operating earnings of $1.27 a share, beating the 17-analyst estimate of $1.16 and the year-ago 96 cents. The company said it would aggressively repurchase stock as conditions allow.
slid 4 7/8, or 6.4%, to 71 after it posted a smaller-than-expected loss last night, but warned that losses would deepen in the current quarter.
Following the warning,
cut its rating on Amazon.com to near-term accumulate from buy. Meanwhile
Donaldson Lufkin & Jenrette
reiterated its top-pick rating on Amazon.com and set a price target of $140.
Fellow online book behemoth
bounced 7/16 to 20 after it posted a third-quarter loss of 15 cents a share, smaller than the four-analyst estimated loss of 23 cents a share and the year-ago loss of 16 cents a share. All figures reflect pro forma consolidated operations.
hopped 3 9/16, or 5%, to 74 after it posted third-quarter earnings of $1.16 a share, in line with the 14-analyst estimate and up from $1.03 a year-ago.
American International Group
soared 6, or 6.4%, to 99 after it posted third-quarter earnings of 79 cents a share, a penny shy of the 20-analyst estimate but up from the year-ago 69 cents.
dwindled 1 1/4 to 38 3/4 after it posted third-quarter earnings of 59 cents a share, well above the 25-analyst estimate of 53 cents and up from a year-ago 3 cents a share.
advanced 5/16 to 10 3/16 after it reported third-quarter earnings of 22 cents a share, in line with the five-analyst estimate and up from 17 cents a year ago.
jumped 4 7/16, or 9.8%, to 49 5/8 after it reported third-quarter earnings of 5 cents a share, beating the seven-analyst estimate by a penny and the year-ago 5-cent loss, which included charges. The company attributed increased revenue to growth at
and its television segment.
Clear Channel Communications
mounted 3 7/16 to 81 7/16 after it posted break-even results for the third quarter, in line with the seven-analyst estimate but down from 5 cents a year ago.
slid 15/16 to 40 7/16 after it reported first-quarter earnings of 37 cents a share excluding charges, a penny better than the 13-analyst estimate but lower than a year-ago 42 cents.
jumped 1 9/16, or 5%, to 32 1/16 after it posted third-quarter earnings of 2 cents a share, which included charges and costs. The report was above the two-analyst estimate of flat earnings but down from the year-ago 22 cents.
advanced 3/8 to 59 after it reported a third-quarter loss of 50 cents a share excluding items, narrower than the four-analyst expected loss of 64 cents a share but wider than a year-ago loss of 40 cents a share.
sank 7/16 to 27 5/8 after it reported third-quarter operating earnings of 67 cents a share, missing the nine-analyst estimate of 69 cents but up from a year-ago 61 cents a share.
popped 1/8 to 7 after it reported a third-quarter loss of $1.60 a share, wider than the eight-analyst estimate of a $1.45 loss and the year-ago $1 loss.
lost 2 15/16, or 11.1%, to 23 3/8 after it posted third-quarter earnings of 74 cents a share before charges, better than the seven-analyst estimate of 73 cents but down from a year-ago 76 cents.
cut BFGoodrich to hold from buy and lowered its 2000 EPS estimates to $3.10 from $3.55 a share.
bounced 7/8 to 34 3/8 after it reported third-quarter earnings of $1.18 a share, beating the 10-analyst expectation of $1.07 and the year-ago $1.01.
advanced 7/16 to 16 7/8 after it posted a third-quarter loss of 6 cents a share, wider than the seven-analyst estimate of a 5-cent loss and down from the year-ago gain of 43 cents a share.
hopped 5/16 to 9 3/8 after it reported third-quarter earnings of 17 cents a share, in line with the 15-analyst estimate and up from 15 cents a year ago.
mounted 2, or 6.2%, to 33 7/8 after it posted third-quarter earnings of 13 cents a share, a penny better than the 10-analyst estimate and up from a year-ago 10 cents a share, which included a charge.
advanced 2 1/4, or 5.4%, to 43 3/4 after it reported a third-quarter loss of 20 cents a share, narrower than the 35-cent loss forecast by a one-analyst estimate and the year-ago $1.16.
bounced 3/8 to 40 3/8 after it posted third-quarter earnings of 47 cents a share excluding charges, beating the 18-analyst estimate of 41 cents and the year-ago 35 cents.
skidded 1 5/8 to 54 after it reported third-quarter earnings of $1.20 a share, beating the 13-analyst estimate and the year-ago 30 cents a share.
stumbled 1, or 5.6%, to 16 3/4 after it reported third-quarter earnings of 47 cents a share, in line with the 10-analyst estimate and even with the year-ago earnings.
soared 6, or 7.7%, to 83 5/8 after it posted third-quarter earnings of 55 cents a share, a penny ahead of the 25-analyst estimate and up from the year-ago 19 cents.
hopped 1 1/16 to 28 3/4 after it reported first-quarter earnings of 16 cents an ADR, better than the five-analyst estimate of 14 cents but down from the year-ago 20 cents.
Pharmacia & Upjohn
mounted 2 3/4, or 5.3%, to 54 after it posted third-quarter earnings of 47 cents a share before charges, in line with the 17-analyst estimate and up from the year-ago 41 cents. The company said U.S. prescription sales were up 17% in the latest quarter.
fell 1 3/16 to 59 5/16 after it posted a third-quarter loss of $2.10, narrower than the 17-analyst estimate of $2.33 and the year-ago $2.47 loss.
Procter & Gamble
jumped 5 3/8, or 5.4%, to 104 5/8 after it posted first-quarter core earnings of 88 cents a share, in line with the 12-analyst estimate but up from 80 cents a year ago.
edged up 3/8 to 15 after it posted a third-quarter loss of 16 cents a share, greatly missing the six-analyst estimate of an 8-cent profit and down from the year-ago 48-cent profit.
lost 1/16 to 15 5/8 after it reported third-quarter earnings of 80 cents a share, a penny shy of the 13-analyst estimate but up from 43 cents a year ago.
Offerings and stock actions
dwindled 1/16 to 7 after it said its board authorized the repurchase of 750,000 shares.
shot up 6 7/8, or 5.7%, to 126 1/2 after its shareholders voted to approve a proposal to expand the number of common shares outstanding to 6 billion amid investor demand for the company to split its stock for the seventh time.
cut its 1999 earnings estimates on
to $1.53 from $1.54. CVS bounced 1 3/8 to 40 3/8.
Credit Suisse First Boston
upped its rating on
to buy from hold.
Banc of America
also upgraded Exxon, to buy from market perform. Shares of Exxon climbed 1 3/8 to 73 1/8.
Banc of America also upgraded
to buy from market perform. Mobil shares hopped 1 9/16 to 95 9/16.
Merrill Lynch raised its rating on
to near-term accumulate from neutral. Sara Lee advanced 1 1/8 to 26 3/4.
Lehman Brothers raised its 2000 earnings estimates for
to $2.60 from $2.52, citing a lower tax rate and firming operating margins. SCI leaped 7 5/8, or 18.9%, to 47 13/16.
Deutsche Bank Alex. Brown
raised its price target for
to 100 from 93. Sun shares shined up 6, or 6.4%, to 98 5/8.
Brown Brothers Harriman
with a buy rating. Time Warner mounted 4 1/4, or 6.7%, to 67 1/4.
Merrill Lynch raised its price target on
William Wrigley Jr.
to 87 from 81. William Wrigley shares gained 2 3/4 to 80 9/16.
climbed 2 3/16 to 52 1/8 after it said it has selected its CEO Leo Mullin to replace Gerald Grinstein as chairman.
popped 1 9/16 to 54 9/16 after it said it has tapped Donald Winkler as chairman and CEO of its
Ford Motor Credit
division. Winkler immediately replaces Philippe Paillart, who resigned last week to pursue other interests.
added 1 15/16 to 94 15/16 after it said its services unit won contracts worth over $1.5 billion with
and the North American unit of
Separately, IBM signed a five-year deal with
to jointly develop and market customer relations software products and services. Shares of Siebel rose 6 3/8, or 6.7%, to 100 5/16.
bounced 1 1/4 to 41 7/16 after it said it will expand to five cable networks from four over the next six months.
Billed as a low-cost threat to the
of the world,
, owned by
Timber Hill Group
, said Thursday it wants to offer a $1.00-per-trade pricing plan for listed and Nasdaq stocks, $1.95 for listed equity options and $4.95 for listed futures contracts. Fees are inclusive of exchange fees and there's no minimum order.
"This is a no-frills service targeted to the professional trader or investor who tends to use limit orders," said Thomas Petterfy, chairman of Timber Hill Group, in a statement.
In the midst of Wall Street's commoditization of stocks and options, Interactive Brokers has been aggressively marketing itself as a discount options and equities trading firm. The parent company recently offered its best-execution software as a
solution to regulators' calls for linkage of the nation's four option exchanges.
Erin Arvedlund contributed to this story