The Aft Deck's  Instablog

Better-than-expected Q-3 GDP reading sent the US stock market North snapping a 4 day losing streak.

Re-cap of the US Stock Market Action for the session ending 29 October 2009

All 10 S&P 500 sectors close higher on strong market day. The S&P 500 is up 57.6% from its 12-year closing low of March 9, 2009, but the benchmark S&P 500 is off 2.9% from its post-March peak reached on October 19, 2009.

The CBOE Volatility Index .VIX, Wall Street's most closely watched gauge of investor fear, slid 11.3%, its biggest one-day percentage drop in eight months.

Note: As the World begins recovering from the worst financial crisis in 70 yrs, an odd couple of winners have emerged: Stocks and Gold. So far this year, the DJIA, a bet on economic recovery, is up 14%. Gold futures, a bet on calamity, are up 19%. The reason: Low interest rates and heavy government stimulus have poured cheap money into financial markets, helping both the economy and stocks

The DJIA gained 199.89 pts, or 2.05%, to close at 9,962.58, the S&P 500 rallied 23.48 pts, or 2.25% to close at 1,066.11, flirting with 1,100 and marking its biggest 1 day percentage gain in 3 months, and the leading NAS tallied up a + 37.94 pts, or 1.84%, to end the session at 2,097.55.
 
The Big/Broad gains came on the news that Q-3 GDP surged to an annualized growth rate of 3.5%, the expected number was 3.2% after contracting 0.7% in Q-2.

A positive tone among traders and a sharp drop by the US$ helped drive commodity prices North too, resulting in a 2.1% gain for the CRB Commodity Index.

Financial issues lead the charge: the sector rose 4.3%, which is its best single-session percentage gain in three months. Life and health insurers (+7.6%) and multiline insurers (+6.7%).

Materials issues also did well on the day: the sector climbed 3.2% as broader market support and commodities and basic materials prices were propped up by a sinking US$, which lost 0.6% against a basket of major foreign currencies in its 1st down session in seven sessions.

In turn Traders pushed Crude Oil prices up 3.1% to US$79.89 bbl, which helped the energy sector to a + 2.4% gainer.

Dow component Procter & Gamble (covered in Stock Talk yesterday) posted a positive earnings surprise, as did Colgate-Palmolive.

Investors, who only yesterday were charging into many defensive-oriented issues, abandoned them today in favor of riskier holdings, and so Treasuries came under pressure too. That took the benchmark 10-yr T-Note down some 20 ticks, which lifted its yield back toward 3.5%. Treasuries caught additional attention as results from a US$31B auction of 7 yr Treasuries drew a slightly stronger than expected bid-to-cover ratio of 2.65.

Advancing Sectors: Financials (+4.3%), Materials (+3.2%), Consumer Discretionary (+2.7%), Energy (+2.4%), Industrials (+2.0%), Tech (+1.9%), Consumer Staples (+1.8%), Health Care (+1.0%), Utilities (+0.9%), Telecom (+0.6%)

Declining Sectors: (None)

Volume and Breadth: Trade was moderate on the NYSE, with about 1.46B/shrs changing hands, below last year's estimated daily average of 1.49B/shrs, and on the NAS about 2.34B/shrs traded, above last year's daily average of 2.28B/shr. Advancers beat decliners by a ratio of nearly 5 to 1 on the NYSE, and on the NAS, more than two stocks rose for every one that fell.

Hot Topic: IBM to Give Employees 100% Coverage of Primary Care

International Business Machines Corp., the World’s largest computer-services company, will provide US employees with 100% coverage for primary care, a policy designed to curb health expenses. Beginning Y 2010, employees will no longer have to pay deductibles for visits to in-network doctors such as internists, general practitioners and pediatricians, Armonk, New York-based IBM said today in a statement. The company said it is one of the 1st US employers to adopt such a policy.

The decision is aimed at encouraging employees to visit the doctor more often, so illnesses are treated before they become serious. IBM said the policy will cover about 80 percent of its 115,000 U.S. employees The other 20% belong to health maintenance organizations.

“We believe in giving people incentives to get health care early and often,” said Marianne DeFazio, director of health- care benefits and strategy at IBM. “When people have no barriers to getting primary care, you catch things early and you prevent things.”  IBM said it has invested US$79M in nutrition and exercise programs between 2004 and 2007, saving more than twice that amount in health-care costs.

DeFazio declined to say how much the move would cost IBM in the near term. More prevention will eventually cut health cost inflation, she said.  “We believe more efficient and individualized care will result in better outcomes and lower costs for everyone,” she said. ---Paul A. Ebeling, Jnr. www.livetradingnews.com          

Stocks to Watch Today

Abercrombie and Fitch (ANF), Duke Energy Corp. (DUK), Fluor Corporation (FLR) and 99 Cent Only Stores (NDN).

Click below to read the full report:

livetradingnews.com