Sam Collins

Investors Don't Want to Miss Another Rally

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The financial sector and gold mining stocks led the market yesterday, but they couldn't quite bring the Dow Jones Industrial Average (DJI) to a gain for the day. The problem with the Dow was that the telecom sector was hit hard by weakness in AT&T (T) and Verizon (VZ). But strength in Alcoa (AA), up 2.5%, helped offset the other losses and the blue-chip index closed only slightly lower.

The U.S. dollar showed gains yesterday, following two days of heavy selling, so we would have expected the energy sector to be lower. Crude oil did drop, but oil stocks closed higher and were the next best performing sector, finishing 0.6% higher. 

Analysts are expecting the S&P 500 (SPX) to show a 25% decline in profits for Q3, which is slightly better than the second quarter's 27% decline. According to a Wall Street Journal article, the biggest declines are expected in the energy and materials sectors. 

Positive earnings were reported by Yum Brands (YUM), Costco (COST) and Family Dollar (FDO). But despite a gain in earnings, Monsanto (MON) fell 1.37% when management reaffirmed downside guidance for 2010.

At the close, the Dow was off 6 points to 9,726, the S&P 500 rose 3 points to 1,058, and the Nasdaq (NASD) was up 7 points to at 2,110. 

Volume was again light, with the NYSE trading just over 1 billion shares with advancers slightly ahead of decliners. On the Nasdaq, decliners were slightly ahead on volume of 648 million shares.

November crude oil fell $1.31 to $69.57 a barrel, and the Energy Select Sector SPDR (XLE) rose 42 cents to $54.80. 

Gold had another good day with the December contract rising $4.70 to $1,044.40 an ounce. This morning spot gold in Asia broke to a new all-time high of $1,054.35. Traders say that the next resistance is at $1,070 an ounce. The PHLX Gold/Silver Index (XAU) gained $2.54 and closed at $174.80.

What the Markets Are Saying

Stock prices ground higher for the third-consecutive day on the S&P 500 despite a slight pullback for the Dow. But even the Dow made a run for it at the close and almost made it to the plus side, while the S&P 500, Nasdaq and NYSE Composite all closed higher. As for the Dow, Vince Lombardi said it best: "We didn't lose; we just ran out of time."