Thursday Wrap - Dow +0.17%, S&P +0.05%, Nas +0.20%

by: Roy Mehta

The market was able to protect its recent gains Thursday, giving investors hope that the last two days were more than bears covering their shorts. The Dow Jones Industrial Average rose 22.3 points (+0.17%), Standard & Poor's 500 index increased 0.7 points (+0.05%), and the Nasdaq finished up 5.2 points (+0.20%). Volume was not significant at 1.33 billion shares on the NYSE, and decliners managed to beat out advancers by a ratio of about 6:5.

Third-quarter real GDP was revised up to 4.9% from 3.9% on strength in exports and inventories (full story). New home sales increased 1.7% in October to an annualized rate of 728,000, but the increase came after a downward revision in the September home sales figure, and median home sales prices fell more than 8% (full story). The Labor Department said weekly jobless claims increased by 23,000, despite economists forecasting the number would hold steady. The US 10-year Treasury note jumped 24/32 in price, now yielding 3.94%.

Sears (-10.5%) fell after the company reported a 99% drop in profits and overall results were less than anticipated (full story). E*Trade (-8.7%) finished down despite news a consortium led by Citadel would purchase a 20% stake in the company (full story). Del Monte (-7.5%) reported a disappointing quarter and said it expects more challenges in the near future because of rising costs (full story).

Tech (+0.11%) and healthcare (+0.39%) provided some strength in the market, while transportation fell (-0.76%). Crude rose on news of a pipeline explosion in Minnesota (full story) which delivers oil from Canada to the Midwest. Front month crude finished $0.39 higher to $91.01/barrel.

Personal Income and Outlays (8:30 AM), the National Association of Purchasing Management - Chicago survey (9:45 AM), and Construction Spending (10:00 AM) are all expected to be released Friday. It will be tough for bears to dismiss this rally if the market can make it through a Friday afternoon, usually a time when many traders unload positions, without moderate losses.

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