Bargain hunters were out today and working to erase some of the past week's losses in the major indices.
Dow Jones Industrial Average was lately bouncing. A week or two ago, the gains might have looked fairly significant, but after falling almost 380 points yesterday, the Dow's comeback seemed restrained. The
Nasdaq Composite Index was quietly rallying, too.
Subdued or not, it's actually a wonder the market was up at all after the release of the September
Producer Price Index this morning showed that soaring energy prices sharply raised U.S. wholesale prices in September. Also, the September
retail sales number showed that sales in the U.S. jumped to the highest rate in seven months, boosted by car and truck sales and soaring gasoline prices.
What was making that news easier to swallow was a report that Saudi Arabia was not planning an oil embargo against the United States. That eased crude oil prices. Investor optimism was further stoked by some good earnings announcements after yesterday's closing bell and some positive comments about the
S&P 500 index.
Good solid earnings from PC-maker
as well as from
were giving tech a boost.
Gateway was one of investors' favorites; the stock was climbing 15.9%. It helped lift the
Philadelphia Computer Box Maker Index
5.3% and pushed up Dow components
The positive comments on the S&P 500 came from ever-bullish
Abby Joseph Cohen
. She said the index is undervalued by about 15% and reiterated her year-end S&P target of 1575. The index was lately 1.6% higher.
Meanwhile, financials, which suffered this week, were in comeback mode today. Yesterday, Brad Zipper, a trader at
Herzog Heine Geduld
, said financials rally when everything else is good. And guess what? Financials were rallying. The
American Stock Exchange Broker/Dealer Index
was lately 3.7% higher, while the
Philadelphia Stock Exchange/KBW Bank Index
were adding a total of almost 60 points.
Still, today's rally doesn't mean we're in the clear yet. New lows on both the Big Board and the Comp were still far outstripping new highs. Moreover, moderate volume showed that money was still sitting on the sidelines. It'll take some more positive news to get more of it back in the game.
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Philadelphia Stock Exchange Semiconductor Index
jumped about 6%. Those components making the biggest percentage gains include
, up 11.1%,
, 10% higher, and
, up 11%.
Investors were taking their money out of gold and oil. The
Philadelphia Stock Exchange Gold and Silver Index
was down about 3%.
Philadelphia Stock Exchange Oil Service Index
fell 3.6% and the
American Stock Exchange Oil & Gas Index
lately dropped about 3%.
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Bond prices turned lower following hotter-than-expected reports on both consumer spending and wholesale prices.
Retail sales increased 0.9% in September, the largest gain since February, and 0.7% excluding autos. Economists polled by
had forecast gains of 0.6% overall and 0.5% excluding autos. The data suggest that consumer spending, the primary driver of economic growth, continues to run at a very strong pace.
Producer Price Index also rose 0.9% in September, the largest gain since February. Oil prices, which rose 3.7%, were largely responsible. The core PPI, which excludes food and energy prices, gained 0.3%. But that gain too was larger than expected. On average, economists had forecast a 0.5% rise in the PPI overall and 0.1% excluding food and energy. The report fans fears that rising oil prices are leading to a faster rate of inflation overall.
The benchmark 10-year
Treasury note lately was down 6/32 at 100 3/32, lifting its yield to 5.734%.
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