Jim Woods

Why Aren't the Markets Soaring?

    Tweet This

Free Trading Guides

Editor's note: OptionsZone editor Jim Woods will be filling in for Sam Collins today.

Yesterday stocks started off with a positive opening that quickly developed into a continuation of Wednesday's sell-off. But solid earnings gains from some of the regional banks turned the tide to a rush of buying. By the closing bell, the losses incurred in Wednesday's final hour were almost completely erased.

Among the regional banks PNC Financial Services Group (PNC), SunTrust (STI) and Fifth Third Bancorp (FITB) scored with better-than-expected earnings. And in the first 15 minutes of trading, the regional banks were up more than 4%. Then at 10 a.m., the leading indicators for September showed an increase of 1%, which was 0.8% better than expected, and we saw a rush of buying. At the close, PNC had a gain of almost 13%. 

For the remainder of the day, blue chips shined, with earnings from Dow components Travelers Companies (TRV), McDonald's (MCD), 3M (MMM) and AT&T (T) all posting better-than-expected earnings. Travelers led the select group with a gain of almost 8%, but the broad market was really led by financial stocks, with the sector ending 2.9% higher.

Earnings gains from J. Crew Group (JCG) drove retailers to a gain of 1.7%. And Freeport-McMoRan (FCX), which was upgraded by a key analyst, and Dow Chemical (DOW), which posted better-than-expected earnings, helped drive the materials group to a 1.4% gain.

Earnings seemed to be on buyers' minds yesterday, and they appeared to ignore negative economic news like the latest weekly jobless claims, which came in at 531,000 instead of the expected 515,000, and continuing claims, which missed the mark as well. Even a fall in home prices for August by 0.3% versus an expected gain of 0.3% didn't faze the buyers.

And at the close, the Dow Jones Industrial Average (DJI) was up 132 points to 10,081. The S&P 500 (SPX) gained 12 points to 1,093, and the Nasdaq (NASD) rose 15 points to 2,165. 

The NYSE traded 1.3 billion shares with advancers ahead by more than 2-to-1. On the Nasdaq, 744 million shares were exchanged with advancers ahead by 5-to-3.

December crude oil fell 18 cents to $81.19 a barrel, and the Energy Select Sector SPDR (XLE) rose 23 cents to $59.45. 

December Gold fell $5.90 to $1,058.60 an ounce on gains in the U.S. dollar. The PHLX Gold/Silver Index (XAU) fell 22 cents to $174.12.