Stock averages hit new highs inside the final hour of trading and
end with 1.5% gains. The blue-chip Dow Jones Industrial Average closed
above 10,000, a line it hadn't crossed in a year. Better-than-expected
results from Intel (
INTC) and JP Morgan (
JPM) have inspired a new leg
higher for what most analysts have said is an overbought rally,
especially now that the DJIA has pierced 10,000.
September retail sales came in better than expected, which added to the generally upbeat mood.
September retail sales declined following the end of the
government's "Cash for Clunkers" program. Outside of autos, sales were
generally considered impressive, according to analysts.
Retail sales dropped 1.5% for the month. Sales of motor vehicles
dropped 10.4%, the largest decline in four years, more than reversing a
7.3% gain in August. Excluding autos, sales rose 0.5% in September. The
overall sales decline was smaller than Wall Street expected.
Stocks showed little reaction to a 1.5% decline in August business
inventories. The drop was more than economists' mean forecast for down
0.9%.
Minutes from the Federal Reserve's last meeting show a split among
members over the best policy as the economy shows recovery signs.
Policymakers were conflicted over whether to expand or trim a program
intended to drive down mortgage rates and support the housing market.
Fed Chairman Ben Bernanke and his colleagues agreed to slow down
the pace of a $1.25 trillion program to buy mortgage securities from
Fannie Mae and Freddie Mac. Instead of wrapping up the purchases by
year-end, the Fed last month said it would do so by the end of March,
the AP reported.
Financial shares rallied broadly. JP Morgan reported Q3 earnings of
$0.82 per share, up from $0.09 per share a year ago and well ahead of
the analyst mean of $0.52 per share on Thomson Reuters. Revenue was
$26.6 bln, ahead of expectations of $24.9 bln.
Intel reported Q3 revs of $9.4 bln, better than the analyst mean of
$9.03 bln on Thomson Reuters. EPS was $0.33 per share, a nickel ahead
of the Street view. For Q4, the company expects revs of $10.1 bln, plus
or minus $400 mln. The Street is at $9.5 bln.
In other earnings news, Abbott Labs (
ABT) also beat Q3 expectations
and raises its FY guidance. It earned $0.92 per share, better than the
analyst mean of $0.90 per share on Thomson Reuters. Sales were $7.76
bln, in line to just better than the Street view of $7.75 bln.
