Sam Collins

My Money is on the Bulls

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In a week when the stock market treated good news badly and bad news finally rallied the market, traders and investors alike will no doubt be more than happy to call it quits for three days and clear their heads.

Yesterday, stocks reversed course after four miserable days and followed the lead of China, which rallied for a huge gain of more than 5% the night before.

The fact that jobless claims for the week ending Aug. 29 totaled 570,000 (4,000 more than analysts had anticipated) was almost totally ignored, as was the report of continuing claims, which jumped to 6.23 million from 6.14 million.

But stocks did start off weak after the ISM service index topped expectations of 48 by coming in at 48.4, which is a high for the year. Shortly after the ISM numbers, the financial group picked up bargain hunters, and it wasn't long before other groups began to move too.

Even though retailers like Gap (GPS), Limited (LTD) and Target (TGT) reported negative same-store sales, they weren't as bad as feared, so they rallied, as well.

At the close, the Dow Jones Industrial Average (DJI) was up 64 points to  9,345, the S&P 500 (SPX) gained 8 points to 1,003, and the Nasdaq (NASD) rose 16 points to 1,983. 

Volume was relatively low, with the NYSE trading just 1.1 billion shares and Nasdaq crossing 571 million. But on the Big Board, advancers beat decliners by almost 4-to-1, and on the Nasdaq, the ratio was in favor of the advancers by 2-to-1.