Today's Market Update with...

Ron Romaine, Value Line's Senior Industry Analyst

The stock market was back to its winning ways yesterday after a two-day selloff. The Dow Jones Industrial Average surged past the 10,000 mark, buoyed by a handful of positive earnings reports; it ended the day up 132 points at 10,081. The other two major U.S. indexes, the NASDAQ and the S&P 500, also moved higher, rising by 15 points and 12 points, respectively.

On the earnings front, Wall Street took kindly to the report by Wal-Mart Stores that it expects sales to rise this year and increase at a faster pace in 2010. That report from the nation’s largest retailer, which centered on sales growth—a contrast to the majority of recent earnings reports that highlighted cost-cutting efforts—drove consumer stocks higher in afternoon trading.

Investors, too, were encouraged by reports of easing worries about loan losses at banks. Specifically, PNC Financial Group and Fifth Third Bancorp noted that the numbers of bad loans aren’t mounting as rapidly as they had been. Such comments bring renewed optimism that a sustained, albeit uneven, economic recovery is at hand. This all comes ahead of the release of some important economic data next week, highlighted by third-quarter GDP data next Thursday.

Meanwhile, trading on this week’s final day likely will be driven by another round of earnings reports, led by the release of Microsoft’s September-quarter results. We will also get important data on the housing market later this morning, with the release of September existing home sales. This report should be positive, as homebuyers were in a rush to complete their purchases before the tax credit for first-time owners expires.

With a little less than an hour before trading commences, the futures are up slightly. What today brings will likely depend on the tone of earnings reports and the data on the housing sector. Stay tuned.