Bob Pisani is off; this post was written by CNBC producer Robert Hum.
A couple of takeaways from Friday’s solid gains:
1) No sell-off materialized following Thursday’s strong rally. Instead, the extension of Thursday’s rally on Friday gave the markets a modest 3 percent gain for the week – their second weekly gain over the last 3 weeks.
2) Another encouraging result of Friday’s gains that traders noted: higher highs for the markets for the first time in a number of months. Recall, following the S&P 500’s 19-month high of 1,217 back in April, the index has only seen lower relative highs since then (1,117 in June and 1,096 earlier in July). Friday’s gain gave the S&P 500 a 1-month high as it broke above the highs set earlier on July 15. The next technical level that traders have their highs on: the 1,117 mark, which was last seen in mid-June.
Markets Get Boost from FedEx, New Home Sales
Early on this morning, all indications were for a slightly lower open today, but strong earnings guidance out of FedEx and better-than-expected new home sales have given stocks some life after the open. With today’s gains, the Dow Industrials has swung back into positive territory for the year.
FedEx jumps 5 percent after the shipper raised its fiscal Q1 and full-year guidance (the company will report earnings on September 16). The Dow Transport company now sees Q1 earnings of $1.05-$1.25, above estimates of $1.01 and provides a full-year outlook of $4.60-$5.20 vs. $4.98 consensus. The reasons for the bullish guidance: “better-than-anticipated growth in FedEx Express and FedEx Ground volumes." Just like rival UPS, which reported last week, international package volumes have been particularly strong, soaring over 20 percent this quarter for FedEx.
Another very encouraging sign: FedEx announced it is reinstituting its company matching policy for its employees’ 401(k) contributions. The company had suspended that program to help contain costs during the economic crisis.
Following FedEx’s announcement, transports are having another stellar day. The Dow Transports is up 2 percent (outperforming all other indices today), and follows up on a strong 6 percent gain last week (nearly double the Dow and S&P’s gains). UPS rises nearly 2 percent, while truckers Con-Way, Expeditors, and CH Robinson are all up over 2 percent.