Solid Retail Sales, Lower Job Losses Boost Market

The market is getting a big boost from the bulls in the early going, after a couple of reports this morning emboldened sentiment.

The same-store sales reports that came out had a lot of better-than-expected results, and that is giving a big boost to the retail sector. Wal-Mart (WMT) reported a +3.9% increase, and its stocks shot up to its highest level since April 2004. Costco (COST) also looked strong. I have to go throught the reports more, but it would seem that the discounters are doing better as consumers look to make their dollars go further in the face of record gas prices.

Also, weekly jobless claims fell 18k this week to 357,000. This was below the consensus for 375,000. Also, the 4-week moving average fell to 368,500, a level that is well below typical recessionary levels.

The 10-year yield got a boost from these reports, and is back above the 4% level (4.02%). The dollar is mixed this morning, with the Yen dropping again vs. the dollar, while the Euro is higher. ECB President Trichet said that the ECB might hike rates to counter inflationary pressures. I think he is risking a hard landing there, but that may be his goal.

Oil is trading higher this morning, back around the $123 level. The energy stocks are getting a nice bounce along with crude. And the steel stocks are big gainers after Nucor (NUE) raised guidance this morning.

I am always skeptical of strong opens, and we have seen a couple already this week fade into the close. So let's see if we can break the trend today. The Nasdaq looks to be in good technical shape as it breaks back above its 50-day.