Traders-Blog.com

Today, the Dow industrials closed up 15.92 points at 10,568.70, the Standard & Poor’s 500 closed up 1.13 points at 1,228.81 and the Nasdaq Composite Index closed up 10.47 points or 0.5% at 2,151.69. This reflects an upward performance for all three indices for the quarter. Dow up 0.8% for the month and up 2.9% from the second quarter, the S&P 500 Index up 0.7% for the month and up 3.2% for the third quarter, and the Nasdaq closing for a small 0.1% loss for the month but a 4.6% gain for the quarter.

On the other hand, our Model Portfolio closed with a 3.26% gain for this month and a not-so-shabby 15.9% gain for the quarter. Considering this was not an easy quarter because of the increased the market volatility, we are expecting much larger gains in the fourth quarter.

Despite disappointing economic reports, decline in personal spending and high oil prices; the stocks bounced back on a mix of end-of-quarter portfolio reshuffling, and an easing of the anxiety about the hurricane’s impact on the economy.

Today the market breadth was positive. On the New York Stock Exchange, winners topped losers by more than 20 to 12 on volume of 1.54 billion shares. On the Nasdaq, advancers beat decliners by nearly 17 to 12 on volume of 1.65 billion shares.

It was a day of technology with Micron Technology gaining $1.11 or 9.1% to $13.30 on reported strong quarterly results, National Semiconductor closing up $0.67 or 2.6% to $26.20 on news of higher dividend. The Philadelphia Semiconductor index closed up 8.96 or almost 2% to 475.32.

Other gainers included Procter & Gamble up $1.32 or 2.3% to $59.46 on news of approval of its purchase of Gillette which also closed up $1.99 to $58.20, Liberty Global ended up $1.48 or 5.8% to $27.09 on news of its intention to buy Cablecom Holdings AG. Boeing gained 1% to $67.95 on news of acceptance of the deal with its unionists to end the strike.

Amongst decliners, oil stocks fell with Exxon Mobil losing $1.26 or nearly 2% to $63.54, and Amex Oil closed down 14.71 or 1.4% to 1,076.31.

Stock of Kimberly-Clark Corp. was downgraded from ‘Buy’ to ‘Hold’. This led the stock to lose 31 cents to $59.53. Similar downgradation affected shares of Capital One Financial Corp. that slipped 1% to close at $79.52.

Amongst economic news, the revised consumer sentiment index from the University of Michigan dropped to 76.9 in September from 89.1 in August, Personal income fell 0.1 percent in August after climbing 0.3 percent in July; Personal spending declined 0.5 percent in the month after growing 0.1 percent in the previous month. The drop in personal income is the highest since January, the drop is consumer spending is the highest since November 2001. Many economist opine that the devastation brought on by recent hurricanes, and the record-high energy prices have hit the consumer and will slow the economy

U.S. light crude oil for November delivery retreated 55 cents to settle at $66.24 a barrel on the New York Mercantile Exchange. This is a step down of 4.6% for September. Natural-gas futures ended 1.9% lower at $13.921 per million BTU. Natural-gas futures tallied an 80% gain for the quarter, while crude prices climbed almost 13%.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter