Markets advanced Monday morning, with oil reaching a 6-week high above $73 a barrel, a rally in European stocks after Royal Philips Electronics announced its glowing earnings report, and a general sense of economic recovery. Going into a foreseeably light Columbus Day of trading, a weaker dollar has pushed all major energy and commodities sectors notably higher, extending last week’s gains, in anticipation of an onslaught by a spate of Q3 earnings data over the next few weeks.
Intel is poised to offer solid earnings data Tuesday afternoon and many investors are expecting a bullish Q4 outlook from the company, setting a positive tone for chip manufacturers. Fairchild Semiconductor (FCS) and Cypress Semiconductor (CY) data will be out before Thursday’s markets open with Advanced Micro Devices (AMD) posting its report after the close. Nokia, IBM and Google will also report Thursday with JPMorgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp., all reporting Wednesday.
Investors are looking for a decline in consumer loan defaults from the banking sector, and want to see an economic recovery expressed by stable commercial real estate figures. With earnings season already brightened by aluminum producer Alcoa Inc. announcing increased profits, the Dow pocketed 4% gains last week, reaching July levels. All major indices rose in early trading with the Dow and Nasdaq both up 0.5%, while the S&P gained 0.3%.
The weaker dollar is continuing to drive increased business in U.S. export markets, as better Chinese energy demand figures from last week saw Crude gaining 2.6%. Analysts anticipate rising energy demand next year worldwide, while Saudi Arabia, the top exporter, indicated it would continue to regulate its supply to Asia and Europe.
The Dow is now in striking distance of 10,000, a position not seen since October 2008.