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It's 'D-Day' for the Stock Market

by Sam Collins 09/16/09

Stocks started off slow again yesterday with some early selling, but positive comments from Fed Chairman Ben Bernanke, along with supporting economic reports, turned the tide and the major averages.

The August producer price index (PPI) came in with a better-than-expected 1.7% month-over-month increase, and core prices were stronger than anticipated, too. Then the New York Fed's Empire State Manufacturing Survey for September climbed more than expected, and the advance retail sales report for August made the sharpest monthly jump in more than three years.

But the real turn came when Bernanke said that the recession is "very likely over." Stocks and commodities rallied on the news.

However, banks were slow to turn, and Citigroup (C) held the financial sector back by falling 8.85%. Best Buy (BBY) posted worse-than-expected earnings and fell more than 5%, and Kroger (KR) missed its earnings target and fell almost 7.5%.

At the close, the Dow Jones Industrial Average (DJI) had gained 67 points to 9,683, the S&P 500 (SPX) rose 3 points to 1,053, and the Nasdaq (NASD) gained 11 points to 2,102.

Volume on the NYSE reached 1.5 billion shares with advancers over decliners by almost 3-to-1. On the Nasdaq, advancers were ahead by 3-to-2 with volume of 695 million shares.

October crude oil rose $2.07 to $70.93 a barrel, and the Energy Select Sector SPDR (XLE) closed at $54.54, up 54 cents (and that's no misprint, just a lot of 54s).

December gold rose $5.20 to settle at $1,006.30, and the PHLX Gold/Silver Index (XAU) gained $4.06 to $171.08.

What the Markets Are Saying

The shorts got smacked again as early selling was quickly reversed and they had to seek cover. But yesterday was just a bit different than other sessions this month. This time the volume expanded to 1.5 billion shares on the Big Board. This is not a big increase, but enough to signal us that bigger money is starting to move in on the market.

Anyone who is still short should be concerned.

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