Market Summary

Wall Street finished with modest gains Monday in a seesaw session that was heavily influenced the days economic data. Despite the positive signs, investor’s brought back some volatility to the market, dragging the blue ships down to nearly half of their earlier gains. The Dow Jones rose 76.71, or 0.8 percent, to 9,789.44. The broader Standard & Poor’s 500 index rose 6.69, or 0.7 percent, to 1,042.88, and the Nasdaq composite index rose 4.09, or 0.2 percent, to 2,049.20. The Russell 2000 index of smaller companies fell 0.37, or 0.1 percent, to 562.40. Doubting the strength in the financials seems to be the new in thing. Citigroup Inc (C), Bank of America Corporation (BAC), may even throw General Electric Co. (GE) in there with their financing arm.

The yield on the benchmark 10-year Treasury note rose to 3.42%; a 3 basis point gain. Benchmark crude for December advanced $1.13 to settle at $78.13 a barrel on the NYMEX.

Rundown of the Data

The Institute for Supply Management’s gauge of manufacturing activity grew in October at the fastest pace in more than three years. It was driven by businesses’ replenishing of stockpiles, higher demand for American exports and support from the government’s $787 billion stimulus program.
The ISM index shot up to 55.7 in October, the third straight reading above 50, which signals growth in the sector. It was the highest level since April 2006.

The Senate is expected this week to pass an extension of the credit that was originally going to expire Nov. 30. Buyers who sign a purchase agreement by April can now claim the credit. The extension is packaged at $10.8 billion.

The extension will apply to higher income buyers. Previously the credit was available to individual filers making $75,000 a year or less. For couples the limit was $150,000. The new income limit will be $125,000 for individuals and $225,000 for couples.

There’s also something in for move-up buyers. Previously you couldn’t claim the credit if you owned a home in the past three years. Now, if your last home was your primary residence for at least five years, you can claim $6,500 in credit if you buy a new home. The new house can’t cost more than $800,000.

In the meantime, the National Association of Realtors reported that pending home sales jumped 6% today to a reading of 110.1. That’s the highest level since December 2006. And it’s more than 21 percent above a year ago.