Yesterday, the S&P 500 (SPX) poked above the 1,100 mark for the first time since last October, as stocks advanced on a broad front. And, despite low volume, 25 of the Dow Jones Industrial Average’s (DJI) 30 stocks gained ground.

Some of the gains were in anticipation of earnings that were set to be reported today or later this week, like Caterpillar (CAT), up 6.1%, and American Express (AXP), up 2.26%. Caterpillar reported better-than-expected earnings today, and American Express reports on Thursday.

Others gained on earnings improvements reported yesterday, like Gannett Co. (GCI), up 8.15%, and Texas Instruments (TXN), up 3.38%. Both companies reported better-than-expected Q3 earnings.

A weaker U.S. dollar drove commodities and commodities-based stocks higher. The dollar was off 0.3% against a basket of currencies and closed just a fraction above its 12-month low.

U.S. homebuilders’ confidence fell in October, seemingly in anticipation of the expiration of the tax credit for new homes at the end of November.

At the close, the Dow was up 96 points to 10,092, the S&P 500 gained 10 points to 1,098, and the Nasdaq (NASD) rose 20 points to 2,176.

The Big Board traded just 1.1 billion shares with advancers ahead of decliners by 11-to-4. And the Nasdaq’s volume was down, too, trading just 559 million shares. Advancers on Nasdaq were ahead by just under 2-to-1.

November crude oil gained $1.08, closing at $79.61 a barrel, for its eighth straight gain, on optimism over an economic recovery and another day of losses for the dollar. The Energy Select Sector SPDR (XLE) gained 77 cents, closing at $59.76, after making a new recovery high at $59.99.

December gold rose $6.50 to close at $1,058.10 an ounce, and the PHLX Gold/Silver Index (XAU) closed at $178.05, up $1.55.

What the Markets Are Saying

Even though one of the market’s leading sectors, technology, has lagged recently, that’s due more to a focus on the energy and materials sectors, the rise in commodities prices and a fall in the dollar, than a lack of earnings performance.

After the close yesterday, Apple (AAPL) posted a 47% increase in fiscal Q4 earnings as sales of iPhones and Mac computers set new records. The company reported earnings of $1.82 a share versus analysts’ estimates of $1.42. This blowout of the estimates drove the stock to an after-hours gain of 8.2% and could raise the tide of many technology stocks today.

So far, more than 40 S&P companies have reported earnings, and 85% have beaten estimates. And a lot more companies will have to knock the cover off of the ball if the S&P is to continue moving ahead, since the index is now at around 18.5 times earnings versus an average of 12.5 over the last 10 years.

But this will be a big earnings week with 138 S&P companies reporting. And with expectations high, we could see all three of the major indices poke through the top of their bullish resistance lines into new highs and some big gains.

But if one or several disappointments hit the tape, look for a reversal as traders cash in on some big short-term gains and then wait for the next round of selling to take prices back down to the closest support zone.

Our trading, or near-term, target for the S&P 500 is 1,120, with the first zone of support at 1,020 to 1,070, and the 20-day moving average near the top of the support at 1,063.

The Relative Strength Index (RSI) is high at 66.45 and getting close to the very overvalued level of 70 we’ve discussed here before. At this level, investors should buy only stocks with excellent earnings and a high probability of future earnings gains. And a reliance on stocks with a long record of earnings gains and dividend increases will help raise the odds of success.

Today’s Trading Landscape

Earnings to be reported include: Allegiant Travel Co., Alphatec Holdings, American Commercial Lines, Amylin Pharmaceuticals, Applied Industrial Technologies, Arbitron, Astec Industries, Autoliv, Autonomy Corp. plc, Ballard Power Systems, Bank of New York Mellon Corp., Banner Corp., Biogen Idec, BlackRock, Brinker International, BTU International, C.H. Robinson Worldwide, Canadian National Railway Co., Capital Bank Corp., Capital City Bank Group, Carlisle Companies, Cascade Financial Corp., Caterpillar, Cirrus Logic, CNH Global N.V., Coach, Coca-Cola Co., Comerica, Cree, Cymer, DiamondRock Hospitality Co., drugstore.com, E.I. Echelon Corp., First Busey Corp., First Cash Financial Services, First Security Group, Flagstar BanCorp., Ford Motor Co., Forest Laboratories, Fulton Financial Corp., Gilead Sciences, Great Atlantic & Pacific Tea Co., Hancock Holding Co., Hawaiian Holdings, Heartland Express, Heritage-Crystal Clean, Iberiabank Corp., iGATE Corp., II-VI, Illinois Tool Works, Infinera Corp., Intuitive Surgical, Jefferies Group, Kelly Services, Lexmark International, Lockheed Martin Corp., Louisiana-Pacific Corp., M&T Bank Corp., Manhattan Associates, Marten Transport Ltd., Mercantile Bank Corp., Millicom International Cellular S.A., Nabors Industries Ltd., New Oriental Education & Technology Group, NuVasive, NVR, Omnicom Group, optionsXpress Holdings, Parker Hannifin Corp., Peabody Energy Corp., Pentair, Pericom Semiconductor Corp., Pfizer, Phoenix Technologies Ltd., Pinnacle Financial Partners, Plantronics, Polycom, Precision Castparts Corp., Quest Diagnostics, Raymond James Financial, RC2 Corp., Regions Financial Corp., Renasant Corp., Republic Airways Holdings, SanDisk Corp., Seagate Technology, Sherwin-Williams Co., Skf Ab, SLM Corp., Sonic Corp., South Financial Group, Southern Copper Corp., Southwest BanCorp., StanCorp Financial Group, State Street Corp., STMicroelectronics N.V., Stryker Corp., Supertex, Supervalu, Tennessee Commerce BanCorp., UAL Corp., United Technologies Corp., UnitedHealth Group, USG Corp., Vascular Solutions, Vocus, Walter Energy, West Coast BanCorp., Western Union Co., Yahoo, Yara International ASA and Zenith National Insurance Corp.

Economic reports due: ICSC-Goldman Sachs retail chain store sales, producer price index (the consensus expects -0.3%, less food and energy it expects -0.1%), housing starts (the consensus expects 0.615 M), Redbook, API oil industry report and ABC/Washington Post consumer confidence.

Late news: Companies reporting Q3 earnings per share:

• Texas Instruments (TXN): 42 cents versus 39-cent estimate
• DuPont (DD): 45 cents versus 33-cent estimate
• UnitedHealth Group (UNH): 89 versus 76-cent estimate
• Pfizer (PFE): 51 cents versus 48-cent estimate
• United Technologies Corp. (UTX): $1.14 versus $1.12 estimate
• Quest Diagnostics (DGX): $1.02 versus 96-cent estimate
• Coach (COH): 44 cents versus 39-cent estimate
• Caterpillar (CAT): 64 cents versus 6-cent estimate
• Coca-Cola Co. (KO): 82 cents versus 81-cent estimate

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