Equities Update: Bulls Take Charge

4:18 PM, Nov 5, 2009 --

• NYSE up 119.7 (1.8%) to 6,950.16.
• DJIA up 203 (2.1%) to 10,006.
• S&P 500 up 20 (1.9%) to 1,067.
• Nasdaq up 49.8 (2.4%) to 2,105.

GLOBAL SENTIMENT

• Hang Seng down 0.63%
• Nikkei up 1.29%
• FTSE up 0.35%

UPSIDE MOVERS

(+) SIRI gains as revenue tops year-ago, affirms 2009 guidance.

(+) CSCO continues evening upside that followed beat, guidance for revenue gain.

(+) ONNN continues evening upside that followed, Q3 beat, raised guidance.

(+) MGM beats with results.

(+) RX gains as WSJ report says co. near deal to sell itself.

(+) RIMM sets buyback.

(+) SNSS gets FDA orphan drug designation for myeloid leukemia drug.

DOWNSIDE MOVERS

(-) ABK giving back some of gain seen on swing to profit earlier this week.

(-) CF down as Agrium says final offer is $45 per share.

(-) AEO same-store sales decline, guides below Street.

(-) DPTR swings to Q3 loss.

(-) ARO raises Q3 EPS view but sales expectations below Street.

(-) WFMI continues decline that followed FY guidance below Street view.

MARKET DIRECTION

Wall Street looked past the previous session's mixed reaction to a murky Federal Reserve release and relished in upbeat economic data and earnings news Thursday, sending the Dow Jones Industrial Average up 200 points and back above 10,000. It's the biggest one-day jump for the blue-chip index since July 15.

The Labor Department reported this morning that the number of people filing initial claims for state unemployment benefits fell by 20,000 to 512,000 in the week ending Oct. 31. It's the fewest initial claims since early January. Initial jobless claims have been above 500,000 for 51 straight weeks.

The Labor Department also reported that companies increased their output in the Q3 even as they slashed working hours, driving productivity up at a 9.5% annual rate. Unit labor costs -- a key measure of inflation -- dropped at a 5.2% annual rate in the quarter.

The Federal Reserve's policy statement issued Wednesday afternoon, is still rippling through the market as investors and analysts continue to parse it for meaning. In the final minutes of Wednesday's trade, stocks shaved a relatively strong advance to near even by the final bell.

But the Bank of England, keyed on the Fed's move, also left its interest rates at historic lows this morning as expected. The bank also stepped up asset buys to keep credit flowing. The BOE expanded its quantitative easing program by 25 billion pounds, or roughly $41 billion. That news sent the British pound higher. The European Central Bank left its key rate at 1% as expected as well.

Cisco (CSCO), reporting post-bell yesterday, is up more than 2% and helping to lift the tech-heavy Nasdaq Composite Index. It is guiding for Q2 revenue to grow 1% to 4% year-over-year or a range of about $9.18 billion to $9.45 billion. The Street is at $8.97 billion. Cisco reported Q1 non-GAAP EPS of $0.36 per share, a nickel better than the analyst mean on Thomson Reuters. Sales were $9 bln, ahead of expectations of $8.74 bln.

Most retailers are reporting improved results and some are raising outlooks, but a few key teen apparel names are exceptions. Aeropostale (ARO) is down sharply. The company reports Q3 sales of $567.8 mln, below the Street view of $572 mln. EPS are seen in the range of $0.90 to $0.91 per share, up from previous guidance of $0.84 to $0.85 per share. The Street is at $0.87 per share.

American Eagle (AEO) is also an active-volume decliner. The company expects non-GAAP Q3 earnings of $0.20 to $0.21 per share, excluding a $0.07 per share tax benefit. Previous Q3 non-GAAP EPS guidance was $0.19 to $0.21 per share, excluding a tax benefit of about $0.05 per share. The Street view is $0.22 per share. Sales are seen at $749 mln, vs. analyst expectations of $757 mln.

Comments

[tunaman4u2:]

Garbage, but so is cash sitting on the sidelines

Nov 05 04:29 PM

[AxIt:]

From now on it will be a run up untill the holiday season with one or two minor bumps in the road. Enjoy the ride.

Nov 05 04:44 PM

[ebworthen:]

"Initial jobless claims have been above 500,000 for 51 straight weeks."

Where's that credit card?

Nov 05 05:48 PM

[Options Tra...:]

No surprise... Dow supported by strong 50MA, rebounded and going higher... been saying this all week.

Nov 05 08:11 PM