Will Stocks Keep Grinding Higher?

• By the tickerspy.com Staff
• On 4:52 pm EDT, Thursday October 8, 2009

Stocks returned to their winning ways, helped by a better-than-expected weekly jobless claims report, improved retail sales numbers, and a solid earnings report from Alcoa (NYSE: AA - News). If the market can get through the current earnings season unscathed, stocks could very well march higher into year-end without a significant pullback as money managers left out of the rally capitulate and jump into the market to try and play catch-up.

The Homebuilder Stocks Index was the top performing tickerspy Index on the day, led by Brookfield Homes Corp (NYSE: BHS - News) with a 12% gain.

The market rose on the day, with the Dow up 61 points to 9,787. The S&P jumped 8 points to 1,065, while the Nasdaq added 14 points to 2,124. Oil climbed $2.12 to $71.69 a barrel, while gold rose $11.90 to $1,056.30 an ounce.

A drop in jobless claims topped today's economic headlines, as the Labor Department reported that claims fell to 521,000 from 554,000 the prior week. Economists were looking for 554,000 claims. Elsewhere, the International Council of Shopping Centers-Goldman Sachs said retail same-store sales were up 0.1% in September, the first monthly increase since July 2008.

In earnings news, shares of Alcoa climbed 1.1% after the aluminum company's Q3 results topped analyst estimates on both the top and bottom lines. For the quarter, the company earned $77 million, or 8 cents per share, down from $268 million, or 33 cents a share, a year ago. Adjusted EPS was 4 cents. Revenue fell -33% to $4.62 billion. Analysts were expecting a loss of -9 cents on sales of $4.55 billion. Eighteen Pro investors counted the stock among their top-15 holdings at the start of Q3.

Soda and snack maker PepsiCo (NYSE: PEP - News) announced Q3 net income of $1.72 billion, or $1.09 per share, up 9% from $1.58 billion, or 99 cents per share, a year earlier. Revenue dipped -1% to $11.08 billion. The Wall Street consensus was for EPS of $1.03 on sales of $11.25 billion. Looking forward, the company maintained its full-year guidance for mid-to-high single-digit EPS growth. The stock fell -1.3%. Nearly 450 Pro investors counted the stock among their top-15 holdings at the start of Q3.

Shares of Marriott International (NYSE: MAR - News) fell -0.6% after the hotel operator said business will remain tough and predicted North American revenue per room would fall 13% to -16% in Q4. For Q3, the company reported a loss of -$466 million, or -$1.03 per share, versus a profit of $94 million, or 25 cents per share, a last year. Excluding a number of items, adjusted EPS was 15 cents, 2 cents above the Wall Street consensus. Revenue dropped -17% to $2.47 billion, coming in ahead of analyst expectations of $2.39 billion. For Q4, the company guided for adjusted EPS of 20-23 cents versus the estimates of 22 cents. California Pizza Kitchen (Nasdaq: CPKI - News) shares climbed 9.3% after the casual dining restaurant operator upped its Q3 earnings outlook. The company now expects to post EPS of between 22-24 cents versus a prior view of 19-21 cents. Analysts were looking for EPS of 21 cents. Third-quarter revenue slipped -5% to $164.8 million, the company said, coming up short of the $167.4 million analysts were expecting. Same-store sales fell -8.0%.

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