Stocks Building Another Winning Streak

NEW YORK ( TheStreet) -- Stocks rose once again on Friday, gaining ground for a third straight session to keep September's rally on track.

The Dow Jones Industrial Average closed up 48 points, or 0.5 %, at 10,463. Its high for the day was 10,471. The strong finish pushed the blue-chip index's gain so far in September to 4.4%, bucking the historical trend that casts the month as a weak one for equities. The Dow has now risen in six of September's seven trading sessions.

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The S&P 500 added 5 points, or 0.5%, to wrap up the week at 1,108, while Nasdaq lagged slightly, gaining just 6 points, or 0.3%, to close at 2,242.

Stock Wrap: The Real Story, September 10

While overall breadth within the Dow was positive with advancers outnumbering decliners 22 to 8, tech stocks were among the worst performers in Friday's session after leading semiconductor companies lowered their October quarter outlooks, citing slowing demand for PCs. Capital Goods, healthcare and energy stocks however, pushed markets higher.

Chevron ( CVX) and IBM ( IBM) were the Dow's biggest gainers, while American Express ( AXP) and Hewlett-Packard ( HPQ) were the main laggards among the blue chips.

Volumes were still relatively light, indicating many investors are still on the sidelines, awaiting more confirmation that the economy is on the road to recovery.

The Commerce Department said on Friday that wholesale inventories increased 1.3% in July from the revised June level, the highest increase in two years and much higher than the 0.4% economists expected, according to Briefing.com. A rise in wholesale inventories is considered a predictor of higher retail sales.

The inventory report is the latest in a series of recent economic data in the last two weeks that has helped to ease investors concerns about the economy.

Despite the recent positive news flow, Barbara Marcin, portfolio manager of the Gabelli Blue Chip Value Fund, expects the economy's growth in the next year or two to continue to stall. "I don't see anything to contradict another year of really slow growth, if any," she said. "Even if there is an improvement in the manufacturing numbers which will be out next week, we are still so far behind the level we were in 2007. You don't have a need for more spending or hiring."

Marcin said markets will have periods of momentum back and forth but did not expect a rerating in valuations, even though stocks were fairly valued, so long as the country's deficit problems remained unresolved.

President Obama's nationally televised press conference was another highlight on Friday trading. President Obama took the opportunity to announce his appointment of Austan Goolsbee as Chairman of the White House Council of Economic Advisors. Goolsbee will replace Christina Romer, an economist with the University of California, who resigned last month to return to the school.

In his speech, the President urged Congress to back his plan for small businesses. He also took Republicans to task on the issue of extending tax cuts to the wealthy. He said Republicans were holding middle-class tax relief "hostage" in order to extend tax relief to millionaires and billionaires who did not need help.

Athletic apparel retailer Lululemon Athletica ( LULU) was among the day's strongest gainers. The stock soared 13% to $40.57 after it beat analyst expectations. Net revenues rose 55% to $152.2 million and profits jumped 139% to $34.2 million or 30 cents per share. Analysts expected the company to post a profit of 24 cents per share on revenue of $145.89 million.
Lululemon

BP ( BP) expects to delay its quarterly results by a week to give it more time to prepare for additional disclosures related to the oil spill, Dow Jones Newswires reported. The stock rose 0.5% to $38.21.

Nokia ( NOK) named Stephen Elop, who heads Microsoft's ( MSFT) business division, as its new president and CEO. Elop will replace CEO Olli-Pekka Kallasuvo on Sept.21. The stock rose nearly 2% to $9.95.

Texas Instruments ( TXN) announced late Thursday that it was lowering its third-quarter revenue and profit forecast. Excluding items, Texas Instruments is looking to earn 66 cents to cents a share, compared with the prior range of 64 cents to 74 cents a share. Analysts had forecast earnings of 69 cents a share. The stock ended lower by 0.5% at $23.73.

National Semiconductor ( NSM) beat earnings expectations in the first quarter of 2011 but issued guidance that was lower than expectations. The stock sank 6% to $12.08.

Hewlett-Packard ( HPQ) shares fell 1.4% to $38.28 on reports that U.S. investigators were widening their probe on alleged kickbacks paid by its German subsidiary to Russian authorities.

Shares of PG&E ( PCG), the holding company of Pacific Gas and Electric, shed 8.4% to $44.17, after a company pipeline exploded killing 4 people.

Gun maker Smith & Wesson ( SWHC) plunged 7.8% to $3.65 after it gave a disappointing outlook for the October quarter. It now expects break-even results as it lowers production to match the decline in orders.

Footwear maker Crocs ( CROX)declined 4.3% to $11.13, after it maintained its guidance, sparking fears that it might fall short of estimates.

Smithfield Foods ( SFD) said it will sell its 49% stake in Butterball to its joint venture partner. The stock closed down 0.6% at $16.83.

/> Emmis Communications ( EMMS) tanked 12% to $1.07 after the company announced that the tender offer by its chairman to buy out all its shares had expired.

In commodity markets, crude oil for October delivery settled higher by $2.20 at $76.45 a barrel, fueled by a U.S. pipeline shutdown and positive economic data from the U.S. and Japan. The December gold contract settled lower by $4 at $1,248 an ounce.

The benchmark 10-year Treasury note was down by 10/32, strengthening the yield to 2.794%.

The dollar was trading flat against a basket of currencies.

Overseas, European markets ended the day on a mixed note. Germany's DAX ended the day lower by 0.1%, while the U.K's FTSE gained 0.1%. Earlier on Friday, most markets were trading weakly on reports that Deutsche Bank ( DB), one of the region's stronger banks, was considering selling stock to raise as much as $11.4 billion to meet the tougher capital rules. Shares of Deutsche Bank fell more than 5% in Frankfurt on Friday. Shares listed on the NYSE gained 0.8% to $60.50.

Asian stocks gained on Friday, buoyed by positive economic data from the U.S., even as European markets fluctuated. Japan's Nikkei rose 1.5% after the country said that its economic growth was better than expected due to improved capital spending. Hong Kong's Hang Seng Index gained 0.4%.

Dubai World , the state-owned conglomerate, said most of its creditors have agreed to its plan to address its $24.9 billion of debt, helping to ease some concerns about Dubai's financial challenges.

--Written by Shanthi Venkataraman in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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