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S&P 500 breaks resistance with stocks rising to start a busy week for economic data. The Dow ($INDU) added 136.49 points, or 1.33 percent, to a level of 10,406.96. The S&P 500 ($SPX) gained 15.82 points, 1.45 percent, to 1,109.30. The Nasdaq ($COMPQ) tacked on 29.97 points, or 1.38 percent, to 2,197.85. Volume was light once again with the NYSE trading 1.15 billion shares and the Naz turning over 2.13 billion shares. Market breadth was positive by a 25-to-6 and 21-to-7 margin on the Big Board and Naz respectively.

Economic news was a major focus Monday, including bullish comments from Fed Chairman Bernanke. Reports on retail sales and manufacturing activity in the New York region were released, though the results were mixed. In corporate news, Intel (INTC) surprised investors by raising its dividend and Lowe's (LOW) reported earnings. Despite mixed news Monday, stocks were able to rise with the SPX closing above key resistance at 1,100.

Shares of Intel rose 2.17 percent to a price of $20.25 after the chip giant raised its quarterly dividend by nearly 13 percent. This move will put the dividend at 15.75-cents a share, which equates to an annualized rate of return of more than 3 percent given a closing price of $20.25. This isn't huge, but is better than most money market funds and shows that Intel has a lot of faith in the future.

Lowe's shares fell 0.55 percent to $21.73 following the home improvement retailers' earnings report. The company fell a penny short of earnings estimates, but did provide guidance in line with expectations. Traders will get more data on sales of home improvement products when Home Depot (HD) reports Tuesday. Ahead of its report, HD shares added 1.6 percent to $27.63.

Retail sales in October rose 1.4 percent, 5-tenths above expectations. However, retail sales less autos gained just 0.2 percent, half of estimates. Compared with the year ago period, retail sales are down just 1.7 percent compared with a decline of 6.3 percent in September. There is no doubt that sales are still slow, although improving, but could remain a concern as long as the jobs market remains beaten down. The Retail HOLDRs (RTH) gained half a percent on the session to $94.98 with Wal-Mart (WMT) shares losing 4-cents Monday.

Manufacturing activity in the New York region remained in positive territory, but fell sharply from October's figure. The Empire State Mfg. Survey came in at 23.51 in November, well below estimates for 29.0 and the 34.57 reading seen in the prior month. A reading above 0.0 is considered a state of expansion and this repot has remained above zero since August. Traders will get data on manufacturing nationwide tomorrow in the form of the industrial production report.

Fed Chairman Bernanke helped the bulls cause Monday after stating that interest rates are likely to stay low for an extended period. The chairman also noted that unemployment will likely stay high throughout 2010 and this could keep household spending constrained. Mr. Bernanke believes that recent improvements in the economy are not just due to temporary factors.

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

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