US Stocks Rally over 10,000...

Quote:

NEW YORK (Dow Jones)--An improving sign in the labor market and rising
October retail sales gave life to consumer stocks Thursday, with Walt Disney
and American Express leading the Dow Jones Industrial Average back above
10000.

Technology was also strong, with Cisco posting a 19% decline in profits, but
still coming in above Wall Street expectations. In addition, Chief Executive
John Chambers provided upbeat remarks about the outlook for technology
spending, which lifted tech across the board and sent Cisco (Nasdaq) up 64
cents, or 2.8%, to 23.93.

For the session, the DJIA closed up 203.82, or 2.08%, at 10005.96, marking
its biggest point gain since July 15. After ending October on a sour note,
with the index pushing below 10000 on Oct. 26 and staying below that level
since, the DJIA has now finished higher in three of the last four sessions.
For Thursday, all 30 of its components finished in the green, with those
companies at least somewhat exposed to consumer spending trends leading the
tape. Credit card giant American Express climbed 1.78, or 5%, to 37.74,
while Walt Disney tacked on 97 cents, or 3.5%, to 29.

Filings for jobless benefits declined to their lowest level in 10 months
last week ahead of a heavily watched October nonfarm payrolls report due
Friday morning, helping stocks broadly. Consumer firms were also helped by a
1.8% gain for retail sales in October. Though that figure came in below
expectations, some retailers did post margin improvements and lifted their
third-quarter guidance.

Gap was particularly strong, up 77 cents, or 3.5%, at 22.86, after
forecasting a third-quarter profit above Street views.

Among other indexes, the Standard & Poor's 500 rose 20.13, or 1.92%, to
1066.63, while the Nasdaq Composite gained 49.80, or 2.42%, to 2105.32. The
Nasdaq also closed with its biggest point gain since July 15.

On Wall Street, traders and strategists mostly shrugged off the push back
above 10000 for the Dow industrials on Thursday. While over time, a move
above that level could bring more investors to stocks, the fact that the
market has remained volatile and the DJIA has already failed to stay above
that level several times in the past month offsets any likelihood of a
follow-through move purely on the latest push into five digits.

"It's a psychological barrier and will draw in some retail investors, but it
doesn't carry that much significance with people in the professional
investing community," said Robert Pavlik, chief market strategist for Banyan
Partners. "We're up because the economic data is showing a positive trend,
and I still believe there is more growth potential."

Still, that consumer-sensitive issues were the market's leading gainers on
Thursday was a point of concern amongst some traders. While employment
trends have improved, Friday's report on the October unemployment rate is
still expected to show nearly 10% unemployment.

"The consumer in the U.S. is going to be in retrenchment, or the backpacker
mentality for a long time," said Gary Flam, a portfolio manager with Bel Air
Investment Advisors. "Even if they wanted to go back to spending the way
they were, they can't."

Weighing against consumer stocks, CVS Caremark Chairman and Chief Executive
Tom Ryan said in an earnings call the company had some "big client losses"
in its pharmacy benefits business for the 2010 selling season, which sent
shares of the hybrid pharmacy-benefit manager and drugstore chain down 7.28,
or 20%, to 28.87.

In addition, Whole Foods (Nasdaq) dropped 4.96, or 15.5%, to 27.10 as the
high-end grocer posted higher fourth-quarter earnings but provided a
full-year earnings view that wasn't as bullish as Wall Street's
expectations. Also, it expects a holder to convert $425 million in preferred
stock, which will balloon shares outstanding by 29.7 million.

Teen retailers dragged on the October same-store sales report, with American
Eagle down 2.07, or 12%, to 15.79 after it reported a 5% drop in sales when
analysts had expected a 1.7% increase.

Among the positive quarterly reports, CenturyTel increased 1.09, or 3.3%, to
34.27. The company's third-quarter profit more than tripled, beating
analysts' estimates, as results were beefed up by the company's acquisition
of fellow telecommunications provider Embarq.

Satellite television provider DirecTV Group's third-quarter profit rose 0..8%
as higher revenue outpaced higher costs, sending shares up 1.70, or 6.3%, to
28.54.

Sara Lee increased 42 cents, or 3.7%, to 11.82. Its fiscal first-quarter
earnings rose 23.5% on lower costs as results exceeded analysts'
expectations for the packaged-food giant.

Prudential Financial swung to a third-quarter profit as the insurer
benefited from a rebound in stock and credit markets. The company also
boosted its 2009 earnings forecast, but closed down 1.92, or 4.1%, at 44.64,
with some analysts calling the guidance tepid and cautioning against using
the fourth-quarter view as a run rate for 2010.

Agrium said it is taking one more run at acquiring fellow fertilizer firm CF
Industries Holdings, boosting the cash component of its offer by $5 a share
and raising its bid for CF to a value of $93 a share. The news pushed Agrium
up 1.82, or 3.8%, to 49.81, while CF slid 6.49, or 7.5%, to 79.90.

-By Geoffrey Rogow, Dow Jones Newswires; 212-416-2179;
geoffrey.ro... at (no spam) dowjones.com