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Bulls regain momentum following number of better than expected earnings reports. The Dow ($INDU) gained 131.95 points, or 1.33 percent, to a level of 10,081.31. The S&P 500 ($SPX) added 11.51 points, or 1.06 percent, to 1,092.91. The Nasdaq ($COMPQ) tacked on 14.56 points, or 0.68 percent, to 2,165.29. Volume was moderate on the session with the NYSE trading 1.31 billion shares and the Naz turning over 2.29 billion shares. Market breadth was positive on the session by a 20-to-10 and 17-to-10 margin on the Big Board and Naz respectively.

Initially, traders were not in the buying mood thanks to a disappointing jobless claims report. However, there were just too many strong earnings reports for the bulls to sit by and watch. Travelers (TRV), McDonald's (MCD) and AT&T (T) all saw gains following their reports with eBay (EBAY) and Amgen (AMGN) moving lower.

Jobless claims for the week ending Oct. 17 rose to 531,000 from an adjusted reading of 520,000 in the prior week. Economists were looking for a reading closer to 519,000, though the four-week moving average did fall for the seventh straight week to 532,250. In other economic news, the leading indicators index rose 1.0 percent in September for its sixth consecutive gain. This is another sign that an economic recovery is underway.

AT&T announced that it added more net wireless customers in the third quarter than in any prior third quarter. The company did state that earnings fell 1.2 percent, but gains in iPhone subscribers helped T add two million net customers in the quarter. T shares were up only slightly on the session, gaining 0.62 percent to $26.10. T shares have not had the boost in price many other stocks have with the stock up just 1.5 percent this past year.

MCD shares saw better gains Thursday, rising 2.04 percent to $59.52. The fast food giant announced that same-store sales rose 3.8 percent around the world in the quarter. Revenues were down in the quarter, but only because of currency fluctuations and the company beat earnings estimates on a 6 percent rise in profits. MCD has not shown the same volatility many stocks have this past year, with a 52-week range from $50.44 to $64.46.

EBAY saw its shares fall 4.23 percent to a price of $23.97 Thursday. The online retailer announced that earnings fell 29 percent though revenues were up 6 percent. Earnings per share easily topped expectations, but the company provided a disappointing outlook for the fourth quarter, which includes the holiday shopping season. Despite today's losses, EBAY shares are still up nearly 60 percent this past year and reached a 52-week high just one week ago.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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