FirstAlert(tm) Daily 11/3: Manufacturing Recovery?

November 3, 2009

- Commentary -

November 3, 2009 (FinancialWire) (By Philip Holmes) – Stocks ended Monday’s higher after a volatile trading session as investors weighed the lasting impact of the day’s better-than-expected manufacturing data. As if to boost the bulls’ case, Ford Motor Co. (NYSE: F) unexpectedly posted a third-quarter profit of $997 million.

The Dow Jones industrial average closed at 9,789.44, up by 76.71 points, while the Standard & Poor’s 500-stock index gained 6.69 points on the day, to close at 1,042.88. The Nasdaq composite index rose 4.09 points, to finish at 2,049.20.

Early on, investors were cheered by favorable data on manufacturing and pending home sales. The U.S. ISM manufacturing index hit 55.7 in October, up from an appalling 38.7 a year ago. September pending home sales in the U.S. were up 6.1%, following 10 months of incremental gains.

But later in the day came word from President Obama that job losses would likely continue despite promising signs of recovery. There were also dark hints from the Fed about poor loan quality at U.S. banks.

That only added to apprehensions about what the Fed might do next. The Fed’s Open Market Committee kicked off a two day meeting on Monday, and investors are worried that the outcome might be a higher target for the Feds benchmark interest rate target.

With all the mixed messages on Monday you have to see Ford’s Q3 earnings release as the glue that held the optimistic together. The company’s nearly $1 billion dollars in earnings was a big surprise, especially with Q3 being Ford’s first profitable quarter in North America for over four years.

The number was too big to be passed off as a mere “Cash For Clunkers” halo - though many think the company is still to dependent on its finance arm for profits. But a solid win it is for Ford, for the idea that entrenched management can be successfully un-entrenched at the Big Three and that not all American car company’s will need a government bailout to thrive again.

[Go to http://www.financialwire.net/?s=philip+holmes to see more commentaries by Philip Holmes.]

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Today is: Independence Day in Panama and Dominica.

Happy Birthday: Lucan, Andre Malraux, William Cullen Bryant, Edward Douglass White, Bob Feller, Charles Bronson, Phil Simms.

Today in History: John Austin, a highwayman, was in 1783 the last to be publicly hanged at London’s Tyburn gallows. The Bank of Montreal, Canada’s oldest chartered bank, opened in 1817 in Montreal, Quebec. The Times of India, the world’s largest circulated English language daily broadsheet newspaper was founded in 1838 as The Bombay Times and Journal of Commerce. Chevrolet officially entered the automobile market in 1911 in competition with the Ford Model T. The first in the Godzilla series of films was released in 1954 in Japan.

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