Posted on 08/18/2003 1:09:10 PM PDT by Pubbie
The power's on and stocks are surging.
Relieved at a quick bounceback from the nation's worst-ever power outage and bolstered by solid earnings and recent economic news, stocks posted a striking rally today.
The Dow burst through key resistance and ended above 9,412, its highest close since June of 2002. Honeywell (HON, news, msgs) led the way with a 4% gain; other Dow components with big moves included Hewlett-Packard (HPQ, news, msgs), Intel (INTC, news, msgs) and General Electric (GE, news, msgs), all up more than 3%.
Perhaps more significantly, seven of the 30 Dow component stocks hit new 52-week highs: Intel, Wal-Mart Stores (WMT, news, msgs), Caterpillar (CAT, news, msgs), 3M (MMM, news, msgs) )]], Alcoa (AA, news, msgs), International Paper (IP, news, msgs) and United Technologies (UTX, news, msgs). (For a look at all the companies hitting new highs today, click here.)
And it wasn't just the Dow in rally mode. The Nasdaq moved close to its July highs with a gain of 2% as techs surged, while the S&P 500 closed within a whisper of 1,000.
The renewed rally faces a few hurdles tomorrow, with several economic reports and a slew of earnings due out. But for today, things were pretty much all looking up. "We walked in here today expecting a little fallout from the blackout, but if there was any it didn’t last long," Seaport Securities President Ted Weisberg told CNBC. "We have clearly broken out of this trading range."
Powering the move Among the news items helping drive the move up: Wal-Mart Stores, the world’s top retailer, said last week’s blackout will not materially affect sales. In fact, Wal-Mart said that August sales in stores open at least a year could beat its forecast of 3% to 5% growth, helped by strong back-to-school shopping.
Traders were also encouraged that -- despite the blackout, which left much of the Midwest and Northeast without power from Thursday afternoon into the weekend -- stocks held their ground and even made gains. "I think people came in today, decided the market isn't going down and bought the rally," SG Cowen's Todd Leone told CNBC.
The one qualifier: Volume. The market opened despite the blackout on Friday, but trading ran at a crawl. Today it has picked up to the usual (read: slow) levels of a typical summer Monday.
"Volume indicates validity. You wouldn't take a Gallup poll of two people," trader Art Cashin said on CNBC. "Sure, we'll take higher prices. But we'd rather see it happen with higher volume."
Maybe Hillary has shown him his FBI file.
However,I definitely don't feel to badly about Daschole being on life support. I would like to know if the AMEX will come up with a futures manure index on Gray Davis' pants. Put me down to buy a call for 1000 contracts. At what point do you think it'll be in the money?
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