champagne celebrate

After a weak start in the trading day, stocks soared for a third day in a row on encouraging developments out of Europe and signs that the U.S. consumer may be OK.

First, the scoreboard:

Dow: +183, +1.7%
S&P 500: +21, +1.8%
NASDAQ: +46, +1.9%

And now, the top stories:

  • The U.S. stock markets were set up by two huge central bank rate announcements.  The Bank of England unexpectedly announced 75 billion pounds of new quantitative easing.  Futures rallied.
  • But the futures rally quickly evaporated after Jean-Claude Trichet said that the ECB would hold rates steady.
  • Initial jobless claims came in at 401k.  While it’s climbed back above the 400k level, it was below economists’ expectation for 410k.
  • Retailers announced their September sales results throughout the day, and overall things looked pretty good, despite the anemic economy.  Some of the big winners included Saks and Target, whose share climbed 6% and 4%, respectively.  JC Penney actually missed expectations, but its share ended 3% higher for the day.
  • FedEx CEO Fred Smith said he expected holiday shipments this year to rise 2.5% to 3.0% this year.  FedEx is a key bellwether of the economy.
  • The National Retail Federation reported that retailers expected holiday sales to grow by 2.8%.  Unfortunately, they expect temporary holiday hiring to be flat.
  • Earlier today, President Obama announced that he supported a millionaire’s tax that would be more far-reaching than the tax proposed in the Buffett rule.  Stock markets didn’t seem to have a problem with this.
  • Also out of Washington, Treasury Secretary Tim Geithner said a new plan to help troubled homeowners was on the way.  Geithner also said that US banks weren’t at risk of going the way Lehman Brothers, which was good news for shareholders Morgan Stanley and Bank of America.  Morgan closed up 5%.  BofA soared 9%.  Prince Alwaleed also expects a solid Q3 for Citigroup, saying the bank is “on the right track.”  Citi shares jumped 5%.
  • Regarding the housing market, we learned to day that the 30-year fixed mortgage rate fell to an all-time low of 3.94%.
  • Late in the day, the Dutch parliament approved expansion of the EFSF.  With only two countries left to vote, it’s starting to look like a done deal.
  • Apple shares closed modestly lower a day after we learned Steve Jobs had died.  However, we also note that if you had invested in Apple in 1980 or even the beginning of this year, you’d be way up.  Thanks, Steve Jobs.
  • Don’t Miss: 16 Facts About China That Will Make Your Mind Melt

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