9:10am (EST)

The market bounced back in strong fashion yesterday as the bulls snapped a three-day slide and took the Dow to new highs yesterday.  The Dow gained 132 points to finish at 10,450 after reaching a high of 10,524.  The S&P 500 added 15 points to close at 1,106 while the Nasdaq was higher by 30 points and settled at 2,176.

Hewlett-Packard (HPQ, $51.02, up $0.98) reported earnings Monday after the market closed of $2.4 billion, or $0.99 a share, versus $2.1 billion, or $0.84 a share, in the year-ago period.  Excluding one-time items, net income was $1.14 a share which matched Wall Street’s expectations.

Revenue fell 8% to $30.8 billion but was $400,000 ahead of expectations.  This was a good sign as we have been saying that we would have to start seeing some revenue growth.  The other bit of good news was the HP raised its 2010’s earnings. 

The company now expects to earn between $4.25 and $4.35 a share for the year, compared to earlier forecasts between $4.20 and $4.30 a share.  Revenue is expected come in at $118-$119 billion, compared to its previous forecast of $117-$118 billion.  Wall Street is expecting full-year 2010 earnings of $4.32 a share on revenue of $118.9 billion.

In economic news, third quarter GDP (Gross Domestic Product) increased 2.8%, which in-line with what was widely expected, but down from the 3.5% increase that was posted as part of the advance GDP estimate.  Personal consumption was revised downward to reflect a 2.9% increase, which was not as strong as the 3.2% increase that was widely expected.  

The futures have been pointing towards a lower open but they have improved since last night.  World stock markets fell last night following big gains on Monday, with China’s stock market posting its biggest drop in three months after the country’s central bank warned commercial banks to control their lending.

As we head to press, Dow futures are up a point, S&P 500 futures are up by two while the Nasdaq futures are down a half-point.  We may get a lower open this morning but sentiment is improving…

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