Dow crosses 10,000 level thanks to better than expected earnings and economic reports. The Dow ($INDU) gained 144.80 points, or 1.47 percent, to a level of 10,015.86. The S&P 500 ($SPX) added 18.83 points, or 1.75 percent, to 1,092.02. The Nasdaq ($COMPQ) tacked on 32.34 points, or 1.51 percent, to 2,172.23. Volume was bit heavier on the session with the NYSE trading 1.35 billion shares and the Naz turning over 2.39 billion shares. Market breadth was positive by a 23-to-8 and 20-to-7 margin on the Big Board and Naz respectively.

The major market indices once again reached new 2009 highs, thanks in part to JPMorgan (JPM) and Intel (INTC). Banks in general rallied Wednesday after JPM reported better than expected earnings in the third quarter. The company announced earnings of 82-cents a share, 30-cents above estimates. However, JPM did state that credit costs remain high and could stay this way for some time. Nonetheless, JPM shares rallied 3.29 percent to close at $47.16, a new 52-week high. Other bank stocks gained ground as well with Bank of America (BAC) the strongest mover on the Dow, rising 4.38 percent to $18.59. Overall, the Financial Select Sector SPDR (XLF) gained 3.42 percent to $15.73.

Chip related stocks also saw gains today after Intel provided strong earnings results. INTC stated that earnings and revenues fell in the third quarter from the year ago period, but both measures were better than expected. The chip maker also raised its guidance for the fourth quarter, sending the stock to a new 52-week high of $21.27 before closing the session at $21.08, a gain of 2.9 percent. The Semiconductor HOLDRs (SMH) rose 1.45 percent to $26.57 and this index also hit a new 52-week high intraday.

Retail stocks saw gains Wednesday following a better than expected retail sales report for September. Retail sales did fall 1.5 percent during the month, but this was a result of a sharp decline in auto sales following the end of the “cash for clunkers” program. When autos are excluded, retail sales rose 0.5 percent, 2-tenths above expectations. On a year on year basis, retail sales are down 5.7 percent. The Retail HOLDRs (RTH) tacked on 1.20 percent Wednesday to $92.30 and was yet another equity that hit a new 52-week high.

The Dow crossing 10,000 is a psychological break of resistance and now we will have to see if cash on the sidelines will join the party or if profit taking will ensue. As long as earnings results remain better than expected, we might be in store for further gains in the stock market in the weeks to come.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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