Bulls win the battle Monday with economic data positive and Ford (F) announcing strong earnings. The Dow ($INDU) added 76.71, or 0.79 percent, to a level of 9,789.44. The S&P 500 ($SPX) gained 6.69 points, or 0.65 percent, to 1,042.88. The Nasdaq ($COMPQ) rose 4.09 points, or 0.20 percent, to 2,049.20. Volume was heavier than normal on the session with the NYSE trading 1.55 billion shares and the Naz turning over 2.43 billion shares. Market breadth was mixed on the session with winners beating out losers by a 16-to-14 margin on the Big Board, but decliners outpacing advancers by a 14-to-13 margin on the Naz.

Ford shares rallied 8.29 percent on the session to close at $7.58. The auto maker reported a $1 billion profit in the third quarter, its first in nearly two years. Earnings per share came in 38-cents a share higher than anticipated at 26-cents a share. Revenues did fall 2.5 percent year over year, but at $30.9 billion, sales were also well above expectations. The company also stated that 2011 results would be "solidly profitable", which is much better than prior statements for "breakeven or better" results.

Human Genome Sciences (HGSI) rose 35.3 percent to a price of $25.28 on positive results in clinical trials for its lupas drug. Those that had foresight could have made a lot of money in HGSI given the fact the stock was trading at 45-cents just this past March. Biotechs in general saw strong gains Monday with the NYSE Biotechnology Index (BTK) up 2.92 percent to 845.03.

Economic news was positive Monday with construction spending, the ISM Mfg. Index and pending home sales all exceeding expectations. Construction spending in September rose 0.8 percent when a decline of 0.2 percent was expected. However, August was revised down to a loss of 0.1 percent from the initial 0.8 percent advanced. Construction spending remains weak, down 13 percent year on year, worse than the decline of 12.5 percent seen in August.

The ISM Mfg. Index rose to 55.7 in October, up from 52.6 in September. Expectations were for the index to see a mild rise to 53.0. A reading above 50.0 is considered a state of expansion, so this news was viewed bullishly. Inside the report, the employment component moved above 50 to 53.1 and production rose from 55.7 to 63.3. Pending home sales saw strength in September, rising 6.1 percent to a level of 110.1. Pending home sales have been on the rise of late, but these haven't always turned into actual sales thanks to more stringent appraisals.

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