U.S. markets continued the rally that developed on Friday’s key reversal day, as overseas markets were mostly positive, and there was no bad news to put a damper on a reinvigorated market mood. Markets in Europe and Asia were all positive as well.
It was a quiet day for financial news. The Institute for Supply Management (ISM) non-manufacturing index was 56.9 for September — slightly below the street’s expectations for 57.5 and August’s reading of 59, but the street was in a forgiving mood. Traders are still thinking that slow, moderate growth is better than too much or none at all.
The Dow Jones Industrial Average and S&P 500 both rose 1.8% and the Nasdaq was 1.6% higher. All sectors were in the green, with energy, industrials and basic materials leading the way.
Some more established market names had a solid day. Alcoa Inc (NYSE:AA), Mattel, Inc. (NASDAQ:MAT) and Joy Global Inc (NYSE:JOY) were particularly hot.
Alcoa Inc (AA)
AA stock was a solid winner today after announcing a new contract worth $1 billion with Airbus Group (OTCMKTS:EADSY). The terms of the agreement are that Aloca will supply Airbus with advanced fastening systems to enhance the construction of aircraft panels and engine pylons.
Traders are also anticipating a good financial report from AA, as the company reports third-quarter earnings after Thursday’s bell.
AA stock has rebounded from near $8 per share over the past month, after tumbling from $14 earlier this year.
Mattel, Inc. (MAT)
MAT stock was up 8.5% today after the toy company introduced its $75 high-tech “Hello Barbie” doll. The past few years have not been kind to Barbie, now in her 5th decade of existence, and the company is hoping that a bit of technology will help reverse recent slides in sales.
According to company spokespersons, the new Hello Barbie can speak 8,000 lines of conversation, and is geared towards children ages 3 to 9.
MAT stock has been a market laggard since the beginning of 2014 when it sold for more than double the current price.
Joy Global Inc (JOY)
JOY stock blistered up 7% after announcing late on Friday that it is cutting 85 jobs at the Franklin, Pennsylvania facility. JOY has been a laggard due to the softening of demand and prices for coal over the past year, both in the U.S. and overseas.
JOY recently cut its forward guidance for 2015 sales and earnings. However, the worst may be over for the mining equipment manufacturer. After sliding from $42 per share in May to as low as $15 per share last week, Global has now rallied for two consecutive days. Whether this turns out to be the bottom, or just a dead-cat bounce remains to be seen. The stock is clearly oversold at these levels.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
