Monday Wrap - Dow +1.38%, S&P +1.33%, NQ +1.46%

by: Roy Mehta

The first day of the quarter brought buyers into the fold, as despite some bad news in the morning, the markets rallied hard and finished strong. The Dow Jones Industrial Average was up 191.92 points (+1.38%), the S&P 500 gained 20.29 points (+1.33%), and the Nasdaq Composite Index increased 39.49 points (+1.46%). Volume on the NYSE totaled 1.18 billon, as advancers trumped decliners 3:1.

The big news in the morning came from UBS and Citigroup. UBS announced that it would post its first quarterly loss in nine years (full story), while Citigroup said it was expecting its 3rd quarter earnings to come in 60% below last year's numbers (full story). Despite the news, both Citi (+2.3%) and UBS (3.2%) finished higher, perhaps on hopes that the worst was behind the banks. The ISM manufacturing index came in below expectations at 52% (full story). Though the number was a disappointment, it still represented growth in the US manufacturing sector, allowing economists to stay upbeat on the economic outlook.

All sectors except for consumer staples sector (-0.2%), finished Monday with a gain. The financial (+2.08%), utility (+1.6%), and materials (+1.6%) sectors had the strongest performances. Despite the strong day overall, Walgreens (-15.0%) fell after missing its earnings target (full story). Publisher and broadcaster Belo (+18.0%) jumped on news that it would spin off its newspaper division (full story). Homebuilder stocks had solid days after Citigroup upgraded some of the large players in the sector. Outside of stocks, the 10-year Treasury's dropped to 4.57%, crude traded $1.42 lower to $80.24/barrel, and the dollar index (+0.2%) was up slightly.

Tomorrow Pending Home Sales (10:00 AM) will be released. The market will look to add to Monday's record breaking performance.

Sources: TheStreet.com, Yahoo Finance
Commentary: Wal-Mart Sets Holiday Pricing GauntletHousing Prices Will Continue to Fall - Greenspan
Stocks/ETFs to watch: C, UBS, WAG, BLC

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