Stocks collected their third straight daily win today, despite a dose of downbeat manufacturing data. An unexpected monthly decline in the Empire State index gave rise to some pre-market jitters, but -- thanks to a headline-grabbing buyout in the tech sector -- the bulls dominated today's trading. Specifically, Google (GOOG) launched a $12.5-billion bid to acquire Motorola Mobility (MMI), reaping a rather healthy payday for activist investor and Motorola split advocate Carl Icahn. Among the other companies striking deals today were Transocean (RIG), Scripps Networks (SNI), and F5 Networks (FFIV), suggesting that companies are feeling optimistic enough about the economy to put their cash hoards to work. Against this backdrop, traders took their cues from corporate America, and stepped in to scoop up stocks at bargain prices.
The Dow Jones Industrial Average (DJIA – 11,482.90) gathered steam as the session progressed, eventually ending on a gain of 213.9 points, or 1.9%. In fact, the Dow settled atop its 10-day moving average for the first time since July 25, as all 30 blue chips closed higher. Leading the charge was Bank of America (BAC), as the stock rallied 7.9% after unveiling plans to unload its Canadian credit card business.
The S&P 500 Index (SPX – 1,204.49) fared even better, rising 25.7 points, or 2.2%, to settle squarely at its session high. The SPX finished north of 1,200 for the first time since Aug. 4, and also bested its 10-day trendline -- a feat last accomplished on July 26. Not to be outdone, the Nasdaq Composite (COMP – 2,555.20) ended at its own intraday peak, racking up a gain of 47.2 points, or 1.9%. In the process, the COMP tackled its 10-day moving average for the first time since July 26.
As the U.S. dollar softened, crude oil futures climbed right along with stocks. A stronger-than-forecast GDP reading from Japan helped traders rediscover their appetites for riskier assets, as did a round of corporate deal-making on the home front. As a result, crude for September delivery gained $2.50, or 2.9%, to settle at $87.88 a barrel. This rise marked the commodity's first settlement above the $87 mark since August 3.
Gold futures made a turnaround today after two straight losing sessions, as weak manufacturing data continued to provide support for the safe-haven asset. The faltering greenback also helped gold's case, even though a "risk-on" rebound in the equities market capped the commodity's gains. By the close, December-dated gold added $15.40, or 0.9%, to settle at $1,758.00 an ounce.
Levels to Watch in Trading:
Dow Jones Industrial Average (DJIA – 11,482.90) - support at 10,500; resistance at 13,000
S&P 500 Index (SPX – 1,204.49) - support at 1,100; resistance at 1,400
Nasdaq Composite (COMP – 2,555.20) - support at 2,100; resistance at 2,900
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