Stocks are back in rally mode after a wave of positive earnings news from the technology and banking sectors. A bearish reversal in the U.S. dollar has pushed the currency to new lows for the year. This dollar weakness is fueling big gains for oil and that's translating into bigger gains for energy stocks. The NASDAQ Composite managed to hit a new high for the year at 2190 this morning. The S&P 500 also tagged a new high above the 1100 level intraday.
Asian markets were retreating a little after hitting new relative highs yesterday. The Japanese NIKKEI traded sideways to close with a 0.03% loss. Japan's earnings season starts up next week. The Hong Kong Hang Seng lost 0.3% and the Chinese Shanghai index gave up 0.45%. Investors are anticipating positive economic data due out tomorrow. Economists are predicting that China's GDP growth will hit +8.9%.
European markets were quiet as investors bought the lunchtime dip to push stocks back into positive territory by the closing bell. Financials helped lead the way thanks to better than expected results in the U.S. The French CAC-40 rose 0.05%. The English FTSE rose 0.28%. The German DAX gained 0.37%.
Earnings are the market's main focus right now. While earnings season is still relatively new about 78% of the companies that have announced are reporting results better than expected. Technology stocks were doing well thanks to Yahoo's (YHOO) report last night and SanDisk's (SNDK) announcement this morning. SNDK really crushed the numbers. Wall Street was expecting a profit of 26 cents a share. SNDK delivered 75 cents with revenues rising almost 14% to $935 million versus estimates of $787 million. Gross margins surged from 31% to 46%. Shares of SNDK are up 10.2% at 23.70 hitting new highs for the year.
Financial stocks were making headlines with better than expected earnings from Morgan Stanley (MS), US Bancorp (USB), and Wells Fargo (WFC). MS reported third quarter earnings of 38 cents per share. Wall Street was looking for 27 cents. Revenues came in at $8.7 billion beating the estimate of $7.0 billion. USB delivered a profit of 30 cents per shares compared to estimates of 27 cents. Revenues beat the estimates coming in at $4.25 billion for the quarter. WFC surprised Wall Street with a profit of 56 cents per share compared to estimates at 37 cents. Revenues soared over 116% from a year ago to $22.4 billion, which surpassed analysts' estimates. In spite of all the positive news the banking indices aren't moving very much with the BKX index up 0.2% and the BIX index up 0.3%.
In other news the market's daily fixation with the U.S. dollar continues. This morning the dollar reversed lower and has now plunged to new 14-month lows. This is boosting commodities. Gold is up almost $5 to $1,063.50 an ounce. Crude oil is up 3% today to $81.50 a barrel. The XAU gold & silver index is up 2.9% and the GDX gold-miner ETF is up 2.8%. The OSX oil services index is up 2.8%.
Later this afternoon the Federal Reserve will release their Beige Book report. After the closing bell Ebay (EBAY) will announce its third quarter earnings. Wall Street is expecting a profit of 37 cents a share.
Let's take a quick look at charts for the major averages:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Chart of the U.S. dollar ETF (UUP):
A quick scan of the OptionInvestor.com play list reveals that APOL is testing new relative highs near $76. Oil service stock CLB is surging 3.3% to new highs over $112. Coal stock CNX is up 3.8% to new highs over $52. EOG is hitting new highs over $95. FLS is up 2.2% and hitting new 2009 highs above $108. MBT is bouncing sharply with a 5.6% gain. RIG, another oil service stock, is up 2.9% and hitting new yearly highs near $94. BIIB, a put play, is down 2.7% and hitting new relative lows under $47.00.