Stock Market News for September 21, 2010

The September rally picked up steam on Monday, sending major averages to their four-month high, amid hopes the Federal Reserve would announce measures to stimulate the economic recovery. However, volume remained low as market participants were hesitant to make bold moves amid broader uncertainties. 

The Dow Jones Industrial Average closed at 10753.62, its highest close since May 13. The tech-heavy Nasdaq Composite index jumped more than 40 points, or nearly 1.7%, to 2355.83. The widely followed Standard & Poor’s 500-stock index jumped 17 points, or 1.5%, to 1142.71. On the New York Stock Exchange, five stocks rose in price for every one that fell.

The S&P’s move beyond the 1130 and then the 1140 mark were seen as a bullish sign and traders picked up stocks anticipating the rally to continue. All ten S&P 500 industry sectors managed gains of more than 1% on the day, led by advances in financial shares (+2.1%), consumer services (+1.8%), oil and gas (+1.7%), and industrials (+1.6%). An announcement from the National Bureau of Economic Research that the recession officially ended in June 2009 also helped prop up sentiments.   

An unexpected jump in housing starts has sent this morning’s stock futures slightly higher. However, traders appear to be making guarded moves ahead of this afternoon’s FOMC meeting. Ahead of the opening bell, the Dow Jones industrial average futures are up 21, or 0.2%, at 10,692. The S&P 500 futures are up 2, or 0.2%, at 1,139, while Nasdaq 100 futures are up 4, or 0.2%, at 1,986.

Leading the list of DJIA gainers, American Express (NYSE:AXP - Analyst Report) shares jumped 4.2%, with JP Morgan (NYSE:JPM - Analyst Report) up 2.8%, and Bank of America (NYSE:BAC - Analyst Report) up 2.5%. Financial shares strengthened after Discover Financial (NYSE:DFS - Analyst Report) results revealed lower delinquency rates, and the firm said it expects further declines in souring card accounts. Meanwhile, the consumer finance sector was upgraded by Bank of America (NYSE:BAC - Analyst Report).

Sentiments also got a boost from merger and acquisition activity. Reports said IBM (NYSE:IBM - Analyst Report) had offered to acquire Netezza (NYSE:NZ) in a $1.7 billion deal. Also, L-1 Identity Solutions (NYSE:ID) was presented with a purchase offer of $1.09 billion, continuing the string of M&A action in the tech sector. Shares in iPhone maker Apple Inc. (NASDAQ:AAPL - Analyst Report) jumped 2.9% after Kaufman Brothers raised its price target on the shares to $374.

Read the full analyst report on AXP

Read the full analyst report on JPM

Read the full analyst report on BAC

Read the full analyst report on DFS

Read the full analyst report on BAC

Read the full analyst report on IBM

Read the full analyst report on NZ

Read the full analyst report on ID

Read the full analyst report on AAPL