Signs Of Recovery Boost Stocks 3%

Stocks started strong today and never looked backed. Investors keyed in on better-than-expected results and guidance from tech-giant Intel (Nasdaq: INTC) and credit card data, which showed that consumer credit may be bottoming.

The Dow jumped 257 points, or 3.1%, to 8616 - its biggest move since April 9th. The Nasdaq ramped 63 points, or 3.5%, to 1863. The S&P 500 gained 27 points, or 3%, to 933.

After the close yesterday, Intel, the world's largest chip maker, reported Q2 non-GAAP EPS of $0.18, down 36% from the same quarter last year, but 10 cents better than what analysts had been expecting. Sales for the quarter were $8 billion, down 15% from the $9.47 billion reported in Q208, but, compared to the Wall Street consensus, Intel once again beat. Gross margin, which is probably the most heavily tracked metric for semi companies, came in at 50.8%, topping Intel's previously-issued forecast. Looking ahead to Q3, Intel said it expects to report revenue in the range of $8.1-$8.9 billion, which compares to the Street estimate of $7.8 billion. The company also sees Q3 gross margin of about 53%, plus or minus 2%.

On the consumer credit front, data from credit card leader American Express (NYSE: AXP) showed that on a managed basis net write-offs were 9.9% in June, down from 10% in May. 30-day delinquencies on a managed basis, which could lead to future write-offs, fell to 4.4% in June from 4.7% in May. Capital One's (NYSE: COF) net write-offs rose to 9.73% in June versus 9.41% in May, but 30-day delinquencies fell to 4.77% in June from 4.9% in May. Discover Financial's (NYSE: DFS) net write-offs fell to 8.75% to 8.91% and 30-day delinquencies fell to 5.27% from 5.32%, the second straight monthly decline.

Late in the session, the FOMC minutes from June 23-24 meeting showed that conditions in financial markets have generally improved in recent months and household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. The Fed said while economic activity is likely to remain weak for a time, policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.

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