9:05am (EST)
The market continued its winning ways on Wednesday as the bulls celebrated St. Patrick’s Day with a bang. We mentioned yesterday the Dow was poised to test our near-term target of 10,800 and we almost hit it.
We got some good economic news that helped fuel yesterday’s rally. The Labor Department said the Producer Price Index (PPI) fell by a steeper-than-anticipated 0.6% in February as declining energy prices sparked the index’s sharpest drop-off in seven months.
As a result Dow finished higher for the seventh straight session with all three major indexes settling at new highs.
The Dow finished with a 48 point gain, or 0.5%, and closed at 10,733 after touching an 18-month high of 10,767. If we can break 10-8 then we could easily see 11,000 come into play, quickly.
Not to be outdone, the S&P 500 added 7 points, or 0.6%, to finish at 1,166. Our target of 1,175 will now come into play and then possibly a push to 1,200.
The Nasdaq also notched another 52-week high and actually kissed our 2,400 target. The index settled at 2,389, up 11 points (0.5%) after touching the 2,400 level for the first time since September 2008.
In earnings news, Nike (NKE, $70.88, up $0.50) is getting a lift this morning after the company reporting earnings of $1.01 a share for the quarter, versus $0.99 a share in the same period last year. Wall Street was expecting the company to report a profit of $0.89 a share.
Sales came in at $4.7 billion versus $4.4 billion last year. Analysts were looking for sales of $4.6 billion. Gross margins increased to 46% from 43% in the same period.
There were a lot of nervous traders on Wall Street who were worried about the quarter and future orders. Those fears were put to bed after Nike said worldwide future orders for Nike brand athletic footwear and apparel, scheduled for delivery from March through July, was $7 billion, or 9% higher than orders in the year-earlier period.
Wall Street considers the futures an indicator of future sales and this is why we are seeing the continued strength in the stock ahead of the bell.
Shares of Nike jumped in after-hours trading last night to over $73 and the gains have held as the stock is showing a pre-market bid of $74+. We were all over this trade like moths on a campfire and our subscribers are easily looking at triple-digit profits on a call option trade we profiled yesterday. In fact, it could turn out to be our biggest trade of the year so far once we close it.
As we head to press, the Dow futures are up 16 point to 10,679 while the S&P 500 futures are showing a 1 point gain and are at 1,162. The Nasdaq 100 futures are showing a 3 point pop to 1,937. Current subscribers, check the Members Area for the hot details.
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