The market was up again yesterday. And again it wasn’t earnings but an unexpected bonus from an economic report that was the catalyst for buyers to part with more cash.

A surprisingly large increase in pending home sales and a positive reaction to the report by the financial industry drove stocks to new highs. It was the fifth straight month of gains for pending home sales.

The first report of the day was June personal income, and it fell a larger-than-expected 1.3%, while June spending made an expected 0.4% increase. That and tepid corporate earnings from lesser-named companies had the major averages flat until the home sales report.

Here are some of the early morning earnings:

• UBS (UBS), the Swiss bank, fell 7.6% on its seventh loss in eight quarters.
• Archer Daniels Midland (ADM) fell 5.2% after reporting an 83% decline in quarterly earnings.
• Toyota Motors (TM) reported its third straight quarterly loss.
• Before the opening, the European exchanges were lower on disappointing earnings from Siemens (SI).
• Utility stocks fell 1.5% after PPL Corp. (PPL) reported weak earnings and a poor outlook for the remainder of the year.

In the financial sector, it was the REITS that reacted most to the housing news. Apartment Investment & Management Co. (AIV) rose 8.57%, Kimco Realty (KIM) gained 7.53%, and ProLogis (PLD) rose 6.06%.

The banks reacted to it, too, with Wells Fargo (WFC) up 2.91%, Bank of America (BAC) up 2.09%, and JPMorgan Chase (JPM) up 1.54%.

At the close, the Dow Jones Industrial Average (DJI) had gained 34 points to 9,320, the S&P 500 (SPX) rose 3 points to 1,006, and the Nasdaq (NASD) was up 3 points to 2,011.

On the Big Board, advancers were ahead of decliners by 8-to-5 with volume of 1.2 billion shares trading. The Nasdaq traded 656 million shares with advancers ahead by less than 7-to-5.

September crude oil fell 16 cents to $71.42 a barrel after a volatile day of trading with a high of $71.91 and a low of $70.16. The Energy Select Sector SPDR (XLE) fell 9 cents to $51.83.

Gold rose for the fourth straight day, hitting a two-month high of $972.70 before settling at $967.50 an ounce, up $10.90. The gain was attributed to a lower U.S. dollar, a nine-month high in equities, and gains in the U.S. economy. The PHLX Gold/Silver Index (XAU) rose 20 cents to $153.71.

What the Markets Are Saying

Last night, I was reflecting on how similar the current rally is to other big momentum rallies of the past and, most recently, to the Nasdaq’s amazing run that marked the bottom of the 2002-2003 bear market.

In that bear market, the Nasdaq’s primary low was made on Oct. 11, 2002, at 1,108, and the index made a secondary low of 1,253 in March 2003. It then ran almost nonstop, despite howls of “overbought, overbought,” to a peak of 2,154 in January 2004 — a gain of more than 70% from the secondary low!

The current market made a low of 1,268 in March, and a secondary low of 1,727 in July, and is now on a tear with a target of 2,300. That would be a gain of just 33%. But we are again hearing the same “overbought, overbought” cries.

The point is this: Markets with high accumulated momentum, coming off of extremely sold-off lows can, and usually do, make violent, sustained moves to levels that no one could predict.

Hayes Advisory reported that, on July 27, the market was 90% “overbought,” marking the third time it hit that level this year. They also said that, “On average, when the market has been that overbought — only four other years since 1965 — it advanced 13% over the ensuing 12 months.”

Conclusion: When a market is “super-overbought,” it is an indicator that stocks are likely to go even higher.

Today’s Trading Landscape

Earnings to be reported include: 99 Cents Only, Acadia Pharmaceuticals, adidas AG, Agilysys, Agrium, Allete, Allied Irish Banks plc, Almost Family, Alon USA Energy, Alpha Pro Tech Ltd., Alumina Ltd., AmerCo, American Axle & Manufacturing Holdings, American Railcar Industries, American Water Works Co., AmeriCredit Corp., Amerigon, Amerisafe, Ameristar Casinos, Amicas, Amicus Therapeutics, Amtrust Financial Services, Andersons, Aqua America, Ashford Hospitality Trust, Athenahealth, Atlas Air, Atwood Oceanics, Avista Corp., Avnet, Baker Hughes, Blackboard, Blount International, Boise, Bottomline Technologies, Boyd Gaming, Brigham Exploration Co., Brink’s Home Security, Brookfield Infrastructure Partners LP, Cadence Pharmaceuticals, Calgon Carbon Corp., Calumet Specialty Products, Caplease, CardioNet, Cardtronics, Career Education, Cbeyond, Celldex Therapeutics, Celsion Corp., CenterPoint Energy, Central European Distribution, Central Garden & Pet Company, Chelsea Therapeutics, Cisco Systems, Clayton Williams Energy, Cleco Corp., Cognex, Complete Production Services, Concur Technologies, Consolidated Graphics, COPA Holdings SA, Copano Energy LLC, Corrections Corporation of America, Cross Country Healthcare, Cumulus Media, CVR Energy, D&E Communications, Dawson Geophysical, Dean Foods, Devon Energy Corp., Dialysis Corporation of America, Eagle Bulk Shipping, Ebix, El Paso Electric, eLoyalty, Emrise Corp., EMS Technologies, EnergySolutions, Entravision Communications Corp., Erie Indemnity, Essex Property Trust, Excel Maritime Carriers Ltd., FEI Co., FelCor Lodging Trust, FGX International, Forestar Group, Fortress Investment Group LLC, Foster Wheeler AG, FPIC Insurance Group, Fushi Copperweld, Gaiam, Garmin Ltd., General Cable Corp., General Communication, Gilbraltar Industries, Given Imaging Ltd., Global Industries, Goodrich Petroleum, Great Plains Energy, H&E Equipment Services, Halifax, Haverty Furniture, Health Care REIT, Health Fitness, Healthsouth, Henkel, Himax Technologies, Home Inns & Hotels Management, HSN, Imperial Sugar, Infospace, Inland Real Estate Corp., InnerWorkings, Insight Enterprises, Integrys Energy Group, Internap, International Assets Holding, International Flavors & Fragrances, Interoil Corp., Interstate Hotels & Resorts, ION Geophysical Corp., ISTA Pharmaceuticals, j2 Global Communications, Kadant, Kendle, Kimball International, Lakes Entertainment, Legacy Reserves LP, Lincoln Educational Services, Lodgian, LoJack, LTC Properties, Lumber Liquidators, Marchex, Marsh & McLennan Companies, Martin Midstream Partners, McCormick & Schmick’s Seafood Restaurants, Measurement Specialties, Medicis, Medivation, Mercadolibre, Miller Industries, Mobile Mini, Morton’s Restaurant Group, Multimedia Games, Murphy Oil Corp., Nacco Industries, Nationwide Health Properties, NCI, Newport Corp., News Corp., NightHawk Radiology Holdings, Nippon Telegraph and Telephone Corp., NN, Northeast Utilities, NTELOS Holdings Corp., NxStage Medical, Oceanfreight, OGE Energy, OMV AG, On Assignment, Orbitz Worldwide, Orix Corp., Ormat Technologies, OSG America LP, OtelCo., Overseas Shipholding Group, Owens Corning, Paetec Holding Corp., PC Mall, PDI, Penn Virginia, Penn Virginia GP Holdings LP, Penn Virginia Resources, Pennantpark Investment Corp., Perficient, Petrobras Energia Participaciones S.A., PetroQuest Energy, PG&E Corp., Plains All American Pipeline, Polo Ralph Lauren Corp., Polypore International, Prestige Brands Holdings, Primus Guaranty Ltd., Procter & Gamble Co., Prudential Financial, PS Business Parks, Quality Distribution, Quanta Services, Quigley, Radian Group, RAE Systems, RBC Bearings, Red Lion Hotels Corp., Redwood Trust, Regency Centers, RehabCare Group, Resource America, RR Donnelley, Safeguard Scientifics, Seaspan Corp., Service Corp International, Sinclair Broadcast Group, Sovran Self Storage, Spectra Energy Partners LP, Standard Motor Products, Standard Parking, Star Gas Partners, Strategic Hotels and Resorts, SunoCo., Sunstone Hotel Investors, Super Micro Computer, Susser Holdings Corp., Syniverse Technologies, T-3 Energy Services, Targacept, TBS International Ltd., Tecumseh Products Co., Tekelec, Tenaris, S.A., TesCo., The Allstate Corp., Thoratec Corp., Towerstream Corp., Transact Technologies, Transocean Ltd., TravelCenters of America, Triple-S Management Corp., Tsakos Energy Navigation Ltd., Turkcell Illetsim Hizmetleri A.S., UIL Holdings Corp., United Online, Vertex Pharmaceuticals, ViaSat, Vital Images, Vonage Holdings Corp., Wabash National, Walter Investment, WGL Holdings, Willbros Group, WNS Holdings Ltd., Xata, XenoPort, and XTO Energy.

Economic reports due: Mortgage Bankers Association (MBA) purchase applications, Challenger Job-Cut Report, ADP employment report, Treasury refunding announcement, factory orders (the consensus expects -0.9%), ISM non-manufacturing index (the consensus expects 48.2), and EIA Petroleum Status Report.

Late news: Procter & Gamble (PG) reported Q4 earnings per share of 80 cents versus a 79-cent estimate.