Good news from the Commerce Department, coupled with relief that Hurricane Irene caused less damage than expected, gave stocks a boost on Monday. Property and casualty insurers benefited from the collective sigh of relief, with gains averaging five percent. Thin trading volume throughout the day exaggerated gains for all three major stock indices. The Commerce Department put a favorable spin on modestly good news:
Personal income rose 0.3 percent in July, slightly below private-sector forecasts of a 0.4 percent increase, though personal income in both May and June was revised upward. Wages and salaries, the largest component of income, rose 0.4 percent. Real consumer spending jumped 0.5 percent, consistent with expectations, representing the largest monthly increase in real consumer spending since August 2009. Spending was boosted by consumer purchases of motor vehicles and higher home electricity costs due to warmer weather.
Kate Gibson provided this report for MarketWatch concerning the reaction to Hurricane Irene’s actual wrath:
“The fact that the hurricane wasn’t as big as people thought … and the fact that there’s still some damage and we’re still in a situation where you’ve had a lot of bearish sentiment over the past couple weeks, all of a sudden the sentiment just changed,” said Andre Julian, senior market strategist at OpVest Wealth Management, in an interview with MarketWatch Radio. “Temporarily, I think you see a lot of people, especially a lot of investors, on a lower volume day, looking to put more risk back into the market,” he said.
The Dow Jones Industrial Average jumped by 254 points on Monday to close at 11,539 for a gain of 2.26 percent. The S&P 500 gained 2.83 percent to finish at 1,210. The NASDAQ Composite made the most extreme leap, soaring 3.32 percent to end the day at 2,562.
Miami-based corporations enjoyed extraordinary gains on Monday. Royal Caribbean (RCL) rose by an enormous 9.26% to close at 25.80 after CEO Richard Fain’s purchase of 66,000 shares on Friday boosted ratings as well as investor sentiment. Carnival Cruise Lines (CCL) followed in its wake, with a gain of 6.60% to finish at 32.95. Lennar (LEN) surged by 5.60% to close at 14.34. Ryder System ( R ) rose by 2.41% to end the day at 45.45.
The following companies will be playing “beat the number” on Tuesday with the release of their quarterly earnings reports: Barnes and Noble (BKS), Concurrent Computer Corp (CCUR), Dollar General (DG) and DryShips (DRYS). Good luck!