Intraday Market Update
After an early morning dip US equities are well off of their lows and are oscillating between positive and negative territory as the news flows are light and there is little economic data to report. The S&P 500 has gained more than +9% in September and institutional money managers do not want to relinquish those gains before the quarter ends. Gold is trading at another new all time high which seems like a daily event these days. Front month crude has also gained +1.75% after a larger than expected drop in inventory data. The energy sectors are performing well today with the oil services group gaining more than +2%. Natural gas, oil services, oil, coal, and solar stocks all performing well. Overseas, the Asia-Pacific region was mostly higher, while European markets sold off late to post solid losses.

The lone economic data to report today is that the Mortgage Bankers Association purchase applications index rose +2.4% w/w which ends two prior weeks of declines. The majority of the gain came from a +4.5% rise in government purchase applications compared to a +0.8% rise in conventional purchase applications. Refinance applications slipped -1.6% but still remain elevated at 81% of total mortgage applications. Overall mortgage applications fell -0.8% despite new record low rates, which fell -6 bps to 4.38% for a 30 year fixed rate mortgage.

In earnings, shares of Family Dollar (FDO) are up nearly +3% after reporting earnings that beat on the bottom line, while revenue was in line with estimates. The company announced a big stock repurchase program, however, FDO also offered cautious guidance. Recreational vehicle maker Thor Industries (THO) is up +13.5% on very strong earnings report that saw revenues increase +51% y/y while earnings handily beat estimates. The company said total RV segment sales were up +67% y/y, with towable RV sales rising +61%, and motorized vehicle sales surging +99%.

Elsewhere in equities, Green Mountain Coffee Roasters (GMCR) is down nearly -14% after they announced that the SEC is conducting an inquiry believed to be focused on concerns about its revenue recognition practices and the company's relationship with one of its vendors. Essentially, GMCR said they discovered an "immaterial accounting error" relating to the margin percentage it was using to eliminate the inter-company markup in its inventory balance at its Keurig business unit, resulting in a $7.6 million overstatement of pre-tax income. Hewlett Packard (HPQ) is up more than +2% after offering an upbeat outlook for its FY11 guidance at an analyst event yesterday. The company confirmed that its new WebOS tablet computer would begin sales in early 2011, and said they would take a 17% share in the tablet market by 2013.

Core Sector List: Overall reading: 6 sectors advancing, 14 sectors declining
Strongest Sectors: Oil Services, Coal Miners, Oil, Nat Gas, Semiconductors
Weakest Sectors: Home Construction, Real Estate, Biotechnology, Retail

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