Quiet start for stocks Tuesday with traders awaiting Friday's employment report. On Monday, the major market indices rallied sharply thanks to a number of merger deals. Economic data could be one of the focuses Tuesday with reports on same-store sales, home prices and consumer confidence all on tap. Earnings were released from Walgreens (WAG) this morning and reports are on tap from Nike (NKE), Micron (MU) and Jabil Circuit (JBL) later today.

WAG shares are up more than 10 percent this morning following the drugstore operator's earnings report. The company saw a 7.6 percent rise in sales to $15.7 billion with same-store sales up 2.4 percent. Analysts have been pleased with the company's move to cut costs and improve the aesthetics of their stores. The stock is trading above $38 a share, easily breaking through resistance at $34.81, which was its prior 52-week high.

Retailers in general are up Tuesday with the Retail HOLDRs (RTH) rising more than 1.25 percent. Same-store sales for the week ending Sept. 26 rose 0.1 percent week on week with the year on year gain up 0.9 percent according to the ICSC-Goldman report. The Redbook report also saw improvement with its year on year move showing a decline of 2.2 percent; though up from -2.6 percent the prior week.

The release of the S&P Case-Shiller home price index helped the bulls this morning. This report showed that home prices improved in the major metropolitan areas across the country. Only Las Vegas saw negative readings in home prices in July with the year on year drop of 12.8 percent an improvement from June's 13.3 percent decline. Though this data is positive, it is dated, although it does provide another clue that the housing sector is seeing some improvement. Shares of KB Homes (KBH) are seeing gains Tuesday, up 2.5 percent to $17.30.

The third quarter ends Wednesday and the Dow ($INDU) and S&P 500 ($SPX) are on tap for their largest percentage gains since 1998. The Dow is also set to see its largest quarter point gain ever. Though we are at the end of the quarter, volumes could remain on the light side with traders cautious ahead of the employment report due out Friday. Ahead of this data, there are other key economic reports on tap including the ISM Mfg. Index and the Personal Income and Outlays releases due out Thursday.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site