Dow jumps 183 as retail sales boost stocks

Updated: 9:45 p.m. ET

 

Stocks rallied for the third straight day, thanks to decent September retail sales in the United States and more signs from Europe that government and banking leaders are starting to work toward a real solution of its debt crisis. 

There were also some hopes that Friday's jobs report, due at 8:30 a.m. ET, might produce better-than-expected​ results.

Apple (AAPL) shares were down 0.2% to $377.37 on the first day of trading after the death of co-founder Steve Jobs. The shares had risen as much as 1.7% in early trading, and the company's market capitalization briefly took the top spot in the world from Exxon Mobil (XOM).

The rally, led by banking stocks, came as mortgage rates fell below 4% for the first time ever. It's not expected to help demand, however. At the same time, gold (-GC), silver (-SI), copper (-HG) and crude oil (-CL) were all higher. 

The Dow Jones industrials ($INDU) closed up 183 points, or 1.7%, to 11,123. The Standard & Poor's 500 Index ($INX) was up 21 points, or 1.8%, to 1,165. The Nasdaq Composite Index ($COMPX) had added 46 points, or 1.9%, to 2,507, and the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 35 points, or 1.6%, to 2,218.

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Futures trading suggests a down open for stocks, but the market trend may change when the jobs report is released.

The consensus is for nonfarm payrolls to increase by 50,000 after the August report said the economy produced no new jobs overall. The rate of job growth has been slowing for much of the year, especially after the March 11 earthquake and tsunami in Japan.

The unemployment rate is seen holding at 9.1%.

Geithner's comments lift bank stocks
Banking stocks jumped after Treasury Secretary Tim Geithner told the Senate Banking Committee there was "absolutely no chance" that a U.S. financial institution could collapse as Lehman Brothers did in September 2008.

The comment came as Geithner was asked about Morgan Stanley (MS), the big investment house, whose shares are off 44% this year, with most of the gain coming in the third quarter.

There has been conjecture that Morgan Stanley is vulnerable to a collapse in Europe.

"The direct exposure of the U.S. financial system to the countries under the most pressure in Europe is very modest. Europe as a whole, though, is a big deal," Geithner said.

Morgan Stanley closed up 4.8% to $15.18. Bank of America (BAC) was up 8.8% to $6.28. The KBW Bank Index ($BKX) added 4.6% to $37.16.

Why Apple's share price matters
Investors have been watching Apple's share price with more than simple curiosity because of Steve Jobs' death.

The company and Exxon Mobil have been vying for the bragging rights as the world's most valuable company since the summer.

For several weeks, Apple was on top, but the market slump in September knocked the stock down more than 10% from its intraday high of $422.86 on Sept. 20 through Wednesday. On Tuesday, the day before Jobs' passing, Apple's market cap fell below Exxon's.

Just before today's close, Exxon was ahead $356.1 billion to $348.4 billion.

Jobs' influence on technology and on business are enormous. Apple is well on its way to generating revenue of more than $100 billion for its 2010-11 fiscal year. Its iPod, iPhone and iPad products transformed the company into much more than a computer company. The iPad's sales already are larger than the notebook sales of both Hewlett-Packard (HPQ) and Dell (DELL). Its iTunes music store is the world's largest music retailer.

And, of course, Jobs' obsession with melding simplicity in operating a product with great design forced others to take note.

If you had bought 100 shares of Apple at $6.56 on April 17, 2003, its bottom after the dot-com bust, you would be quite happy. Your $656 investment would be worth $37,680 today -- a 5,600% gain.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$82.59			$79.68			4.28%			-9.62%
(per barrel)
Heating oil (-HO)			$2.8611			$2.7766			2.94%			12.48%
(per gallon)
Natural gas (-NG)			$3.5980			$3.5700			-1.85%			-18.32%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.6860			$2.5692			5.83%			9.49%
(per gallon)
Brent crude			$105.73			$102.73			2.89%			11.59%
(per barrel)
Retail gasoline			$3.3920			$3.3990			-1.54%			10.42%
(per gallon; AAA)

Commodities surge as the euro gains strength
The dollar moved lower against major currencies, especially the euro, after the European Central Bank made more aid available to banks on the continent, and there was talk from German Chancellor Angela Merkel and others on the need for many banks to raise new capital to shore up the banking system.

The European Central Bank vowed to buy up bonds issued by European banks and offered emergency loans to the banks to ensure they can meet daily obligations.

At the same time, Merkel and others were speaking again about recapitalizing many banks to ensure their viability. Europe's banks have not had to meet the capital requirements of U.S. banks and have struggled under the weight of the Greek debt crisis and economic slowdown on the continent.

As the dollar moved lower, commodities jumped. Crude oil was up $2.91 or 3.1% to $82.59a barrel. Gold settled up $11.60 to $1,653.20 an ounce, and silver added $1.653 to $32.01 an ounce, a gain of 5.5%.

Interest rates also moved higher, with the 10-year Treasury yield rising to 1.986% from Wednesday's 1.905%.

The market's stunning turnaround
The Dow is up more than 468 points, or 4.4%, in the last three days days of trading. The S&P 500 has gained 6% in those three days, with the Nasdaq rising 7.3%.

If you measure the gains from the lows on Tuesday, they're much larger: 6.9% for the Dow, 8.4% for the S&P 500 and 9% for the Nasdaq.

The major indexes are in position to finish the week with a gain; it would be the Dow's second weekly gain in a row. The gains would be welcome. The market's third quarter was miserable. The Dow fell 12.1%, with the S&P 500 off 14.3% and the Nasdaq down 12.9%.

Better, they have blasted through several resistance levels and have some analysts talking about a big year-end rally.

Some skepticism is appropriate, however. First is the obvious: The European problems are still quite dangerous. President Obama discussed his worries that a European meltdown could seriously damage the domestic economy.

Second, the S&P 500 finished at just above 1,165. That's the upper band of its trend line since Sept. 20 (ironically, the day Apple hit its all-time high). What often happens in these instances is that stocks pull back. A weak jobs report would offer the perfect trigger.

Some cheer from retailers
Target (TGT), Nordstrom (JWN), Macy's (M) and other retailers reported September sales results that beat Wall Street's expectations. While some of the sales were driven by deep discounts, analysts said higher sales figures suggested the U.S. economy was not falling into another recession.

The retail reports helped the Standard & Poor's Retail Index ($RLX) move up 2.1% to 510.

There were a few disappointments -- JC Penney (JCP) saw a September slip compared with a year ago and cut its earnings forecast. Wet Seal (WTSLA) shares fell 12.5% to $4.05 after its sales missed estimates.

A broad rallyexcept for Apple
This was a really broad rally, with financial stocks giving matters an extra push. There were sizable gains for transportation and semiconductor stocks. Gainers were ahead of decliners 9-to-1 on the New York Stock Exchange and 7-to-3 on Nasdaq.

Twenty-six of the 30 Dow stocks gained on the day, led by Bank of America and Alcoa (AA), which reports third-quarter results after Tuesday's close. Coca-Cola (KO) was the laggard, down 0.2% to $65.39.

A total of 468 S&P 500 stocks were higher, led by Express Scripts (ESRX), up 11.4% to $40.02, and Wynn Resorts (WYNN), up 10.5% to $132.58. The laggards were coal-producer Alpha Natural Resources (ANR), down 2.7% to $19.17, and Yahoo (YHOO), down 1.7% to $15.65.

Yahoo fell on reports Microsoft (MSFT) may not bid for the company. (Microsoft publishes MSN Money.)

Eighty-five Nasdaq-100 stocks were higher, led by Express Scripts and Wynn Resorts. Yahoo was the laggard.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0100%			0.010%			-50.00%			-91.67%
5-year Treasury note			1.006%			0.960%			4.25%			-50.10%
10-year Treasury note			1.986%			1.905%			3.22%			-39.91%
30-year Treasury bond			2.949%			2.883%			0.96%			-32.39%
Currencies
U.S. Dollar Index			79.088			79.385			0.02%			-0.25%
British pound			1.5439			1.5442			-0.90%			-1.07%
(in U.S. $)
U.S. $ in pounds			£0.648			£0.648			0.90%			1.08%
Euro in dollars			$1.34			$1.34			0.54%			0.27%
(in U.S. $)
U.S. $ in euros			€ 0.745			€ 0.744			-0.53%			-0.27%
U.S. $ in yen			76.86			76.69			-0.34%			-5.53%
U.S. $ in Chinese			6.37			6.38			-0.11%			-3.69%
yuan
Canada dollar			$0.963			$0.964			0.87%			-4.01%
(in U.S. $)
U.S. dollar			$1.039			$1.037			-0.79%			4.18%
(in Canadian $)
Commodities
Gold (-GC)			$1,653.20			$1,641.60			1.90%			16.31%
(per troy ounce)
Copper (-HG)			$3.247			$3.106			3.00%			-27.00%
(per pound)
Silver (-SI)			$32.0050			$30.3520			6.39%			3.45%
(per troy ounce)
Wheat (-ZW)			$6.1600			$6.2525			1.11%			-22.44%
(per bushel)
Corn (-ZC)			$6.0550			6.055			2.19%			-2.73%
(per bushel)
Cotton			$1.0273			1.023			2.54%			-29.06%
(per pound)
Coffee			$2.3440			2.277			2.40%			-2.54%
(per pound)
Crude oil (-CL)			$82.59			$79.68			4.28%			-9.62%
(per barrel)