While the biggest news of the day is still to come, the market has received some good news this morning and is moving higher across the board. The Dow is higher by 97 points. The Nasdaq is higher by 16, and the S&P 500 is up by 12. The Labor Department reported that the PPI came in lower than expected, with wholesale prices dropping 1.4% in the last month led by a decrease in energy costs. This number helped the market some since it suggests inflationary pressures are under control for the time being.
The biggest reason for the early gains in the equity markets though is the positive earning surprises. The largest of those surprises this morning was Lehman Brothers Holdings Inc (NYSE:LEH). Lehman reported that 3rd quarter profits fell less than expected as strength in stock trading and investment banking offset some of the losses in the mortgage market. Investors were fearing the worst for these earnings, so Lehman got a nice reaction. LEH shares are higher by 3.05% so far today.
Best Buy Company (NYSE:BBY) also shocked the street with a very strong earnings number. The company also raised its full-year earnings projections slightly. The company attributed the strong number to strength in notebook computers, video games, and international sales.
The Kroger Company (NYSE:KR) also knocked the ball out of the ballpark on its earnings number this morning. The company reported 38 cents, versus analysts estimates of 34 cents. Kroger also raised its earnings estimates for the entire year. The company has been successful in raising prices and has been able to achieve higher margins.
There are several notable stocks hitting new 52 week highs this morning. The Proctor and Gamble Company (NYSE:PG) is hitting a new high for the sixth session in a row, moving up by 0.62% on the day. Medtronic Inc (NYSE:MDT) has hit a new 52 week high this morning of $55.12 per share. Cummins Inc. (NYSE:CMI) is up by 3.74% to a new high after reaffirming its earnings guidance.
The moves in the stock market thus far today are very clearly subject to change. Once 2:15 rolls around, the market will respond totally to the news from the Federal Reserve. Expect huge volatility in the last hour and 45 minutes of trading, with stocks likely reversing course numerous times.
I will post a complete review of the entire trading day later on tonight.
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