A drop in the number of newly laid-off workers and upbeat remarks from bellwether Cisco Systems injected confidence about an economic recovery ahead of this morning’s highly expected October jobs report, propelling the Dow average to its first close above 10,000 in two weeks.
Cisco Systems’ (NASDAQ:CSCO) CEO John Chambers said he now sees a global economic recovery, fueling a rebound in the company’s sales this quarter. The Dow average jumped 203 points, or 2%, while the tech-heavy NASDAQ, riding high on Cisco’s forecast, bolted up 50 points or about 2.4%.
All ten S&P 500 industry groups ended in the green, with banking shares advancing 2.6% as analyst Dick Bove of Rochdale Securities noted the group will double by the end of 2010. Technology shares advanced 2.2%. Qualcomm Inc. (NASDAQ:QCOM) jumped 5.4% to $43.85 and Microchip Technology Inc. (NASDAQ:MCHP) gained 3.9% to $25.37 after it was raised to “buy” from “neutral” at FTN Equity Capital Markets. Research in Motion (NASDAQ:RIMM) jumped on news of its $1.2 billion share buyback plan as well as a Standard & Poor’s ratings increase to “buy” from “hold.” A report on the semiconductor industry projected sales growth of 10% in 2010.
On the retail sales front, action was largely mixed. About half of firms that reported numbers missed expectations as the growth proved selective. Costco (NASDAQ:COST) posted 3% same-store-sales gains excluding gasoline results; Gap (NYSE:GPS) registered a 4% sales growth and raised its third quarter guidance. Luxury retailers Nordstrom (NYSE:JWN) showed surprising gains with its 6.5% sales increase.
On the political front, President Obama is expected to sign into law today an extension and broadening of the homebuyers’ tax credits, to include both first-time buyers’ credits of $8,000, and existing homeowners, in residence for over five years, of $6,500. The measure also includes an extension of unemployment benefits by up to twenty weeks.
