Now that Labor Day has come and gone, most of Wall Street has returned to work and trading volumes are picking back up.  After moving sideways through the Dog Days of August, September has so far resumed the Up, Up and Away Trend established since March.  The following news items from just this morning are driving out sized daily gains in some atypical names and supports our call for remaining bullish.

1.)  United Parcel Services (UPS) stock broke out yesterday.  This is important in that the company’s stock is the most highly correlated with future GDP of any S&P 500 company. (Stock up 8% in last two trading days.)

2.)  Procter & Gamble (PG) reaffirmed guidance this morning, with a slight upward bias to sales and earnings projections.  They also indicated that lower commodity costs going forward should help them, a major part of their cost of goods.  (Stock is up 4% today, a very large and atypical percentage move for a company that has woefully lagged the market this year.)

3.)  Qualcomm (QCOM) raised their shipment expectations among distributors. 

4.) Disney’s Chief Financial Officer (DIS) comments at a conference that he sees positive signs in the advertising market, another highly sensitive economic indicator.  They also made a big acquisition of Marvel last week, a further sign of corporate confidence.  (Disney’s shares are up 4% today as well and like, P&G, this is an unusual percentage move.)

5.) Indian off shore consulting company Cognizant Technology Solutions (CTSH) indicates at a conference that revenue growth trends have stabilized and that they continue to show signs of acceleration intra quarter.

6.) Texas Instruments (TXN) raised guidance again.  Many semiconductors have done this repeatedly in the last couple of months as inventory levels are in a rebuilding stage.  While increased guidance by semiconductor companies is often a lagging indicator – in other words by the time they guide up, the stocks are already up and often set for a fall – inventory levels are still short of where forward demand levels might likely go.   Over the summer months this area has generally moved sideways, so perhaps a breakout is possible.

7.) Our new Paychex salesperson indicated that business employment activity seemed to be loosening up a bit, at least in the territory she covers. 

Next week, we will here the first of third quarter earnings results, with Best Buy and Adobe Systems both reporting earnings.  As October rolls around, I fully expect we will hear more about current business trends directly from company managements, which is where the rubber meets the road of the macroeconomic data we’re all hearing.  

“Less bad” was enough to really move stock prices coming off their depression lows, but “better” may be required to continue the move from here.  So far, the very recent commentary – like that of today – appears constructive.  If the tone continues to improve as I expect, a move to 1200 on the S&P 500 could be achievable and perhaps even conservative.  Remember the market was down 37% last year and is up only 15% year to date.  Historically, we’ve had much stronger than 15% gains in the market during economic rebounds.