Thursday, October 22, 2009

DJIA up big, but volume is lacking

Another day, another higher close for the DJIA.

The index cruised higher today, up 128points to reclaim its >10,000 mark. Three components reported earning before the open.

-->>3M, almost a 6% weight in the index, beat revenue and earnings estimates, sending the stock +3.2%.

-->>McDonald's at 4.4% of the DJIA, reported light revenues but EPS 5cents ahead of expectations, sending shares +2%

-->>Travelers was the standout, with it's 7.6% jump responsible for over a quarter of the whole move in the index. The company beat by 30cents and raised full year guidance.

Also helping the DJIA today was "where" the outperformers were, in terms of index weight. The top five, accounting for 31% of the index, were up 1.5%, while the bottom five, accounting for only 6%, were up just half a percent. The point being, the outperformance was where it counted, in the stocks that mattered most.

The only negative is that, as has been the case for much of this rally, volume has been unimpressive -->> as in the move upwards is tentative.

Among the top 5 weighted DJIA stocks, daily volume was generall lower than daily columes of the same week the last few years:

-IBM did less than half the volume that we've seen the past several years in October
-Chevron well below October 2008 volumes, but closer to 2007
-3M, even on earnings day, did less volume than this time last October
-Exxon volume was pretty comparable
-UTX did meaningfully less volume than the last several October periods



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