Sam Collins

Can the Markets Break Out?

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Despite a batch of disappointing economic reports yesterday, the stock market managed to hang onto a small gain.

The markets opened higher on better-than-expected economic numbers from Europe and better-than-expected earnings from Wal-Mart (WMT). But when the U.S. jobless claims came in higher than expected and retail sales for July missed the target, stocks turned down.

However, the pullback didn't last long as buyers in banks emerged, driving the sector to a 2% gain for the day. The leader of the group was again Bank of America (BAC), which rose on news that insiders were buying the stock, as well as Paulson & Co.

Materials stocks gained too, up 2.1%, with steel and coal companies leading the charge. Peabody Energy (BTU) gained 6.1%, and Consol Energy (CNX) was up 7.3%.

Treasuries did well yesterday following a $15 billion auction of 30-year bonds. The auction produced a high yield of 4.54%.

At the close, the Dow Jones Industrial Average (DJI) was up 37 points to 9,398, the S&P 500 (SPX) gained 7 points to 1,013, and the Nasdaq (NASD) rose 11 points to 2,009.

The NYSE reported trading only 777 million shares with advancers ahead by 2-to-1. The Nasdaq crossed 622 million shares with advancers ahead by 7-to-5.