After a trio of nondescript sessions to start the week on Wall Street, investors were not about to try and make it four in a row, as the stock market left the starting gate quickly yesterday and save for several brief and rather inconsequential attempts to halt the advance, sped aggressively forward in the latest daily tug of war between the bulls and the bears. It was a constructive way to get the festivities under way in the heavy earnings season.
On point, the U.S. equity market, underpinned by dovish monetary intonations from the European Central Bank, following the ECB’s latest move to hold interest rates unchanged, and a supportive issuance before our market opened on weekly jobless claims–which came in at 259,000–stocks began the latest session with strong early gains, which led the Dow Jones Industrial Average up quickly to an increase approaching 200 points. The other indexes responded in kind.
Then, just as the market was settling in, word came from the National Association of Realtors that sales of existing homes had risen by 4.7% in September to an annualized rate of 5.55 million transactions. House prices also rose; inventories remained lean–actually falling by 2.6% in the latest month; and sales increased in all four regions of the country. It was a welcome respite from the more sobering monthly issuances released over the past several weeks. Once that report hit the wires, the market’s rose further, with the Dow pushing up to an increase just north of 315 points by late morning.
This strength then carried into and through the lunch hour, lifting nine of the 10 leading market sectors higher, with the industrial group, the basic materials area, and the technology space leading the way to mid-afternoon gains of 2%. Only the beleaguered health care category was under water, being off nearly a percentage point, on particular weakness in the medical services category. Still, the averages, in the aggregate, were holding near their best levels of the day at that point.
Meanwhile, other key influences yesterday were corporate earnings reports for the third quarter, which are coming out en masse. Here, though, the better market tone aside, the data are no better than mixed, with two Dow-30 components posting lackluster results yesterday.