US markets began the normally sluggish September with healthy gains as momentum from Friday carried over. The Dow Jones Industrial Average added 91.12 points (+0.68%), the S&P 500 was up 15.4 points (+1.05%), and Nasdaq enjoyed a 33.9 point (+1.3%) rally. Volume was light at 1.37 billion shares at the NYSE and advancers beat decliners by a ratio of 3:1.
Tech and energies took the lead, as both are not as affected by the current credit concerns as other sectors. Nasdaq was given a lift by M&A activity as MetroPCS Communications offered $5.5 billion in stock for its rival Leap Wireless, and crude oil was up $1.04 to $75.08/barrel on concerns of the hurricane season worsening. Yahoo! bumped up 5.5% as Bear Stearns selected it as one of its "top picks" and Apple was up 4.1% from investors jumping into the stock a day before its new iPod product release. General Motors posted a surprising 6.1% increase in auto sales which helped the automaker's shares rally 3.8%.
After Bernanke's speech on Friday, where the Fed Chairman seemed ready to help stabilize the markets as needed, the Fed added a moderate $5 billion to the banking system through a repurchase agreement. Tuesday's ISM number was nearly in line with estimates and construction spending was down greater than expected at -0.4%; both numbers did not hurt the chances that the Fed will lower rates when it meets on September 18th. The US 10-Yr bond increase slightly to 4.5580%.
Tomorrow, Pending Home Sales (10:00 AM) and Crude Inventories (10:30 AM) will be reported as the market tries to continue the upswing. Historically in the month of September, the S&P 500 normally loses 0.7% according to Stock Trader's Almanac.
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