Wall Street Opens Higher to Kick Off Fourth Quarter
Stocks opened higher this morning as traders open the fourth quarter by looking forward to third-quarter earnings out soon.
In the first 15 minutes of trading, the Dow is up four-tenths of 1 percent.
The broader S&P 500 is a little more than half of 1 percent while the tech-heavy Nasdaq is up more than three-quarters of 1 percent.
We're at a real crossroads in the markets.
With the third quarter ended, traders will be looking forward to the quarter's corporate earnings to see if companies are finally bringing in some revenue and not just cutting costs.
In the second quarter, 75 percent of companies beat earnings-per-share estimates, but only 50 percent beat revenue estimates, Miller Tabak reports. That means earnings numbers were being hit by cost-cutting.
But you (a) can only cut so much and (b) can't cut your way to long-term profitability. Any recovery will not be led by jobs -- that has been made abundantly clear, thanks to the 9.8-percent-and-rising official unemployment rate. It will have to be led by corporations. When third-quarter earnings start coming out, we'll see if companies are starting to do business again in a normal, profitable fashion.
-- Frank Ahrens
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October 5, 2009; 9:55 AM ET
Categories: The Ticker | Tags: Dow Jones, nasdaq, s&p 500
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