Market Snapshot October 8, 2009, 4:40PM EST

Stocks Finish with Solid Gains

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Reuters reported the European Central Bank kept its interest rates at a record-low 1.0% on Thursday. ECB President Trichet in his summary repeated that rates remain appropriate, adding that data confirms the ECB's previous assessment. The president added that monetary policy is providing strong support to the economy and repeated that measures will be unwound in a timely fashion when the economy improves. At the same time Trichet called on governments to design exit strategies and said the need for fiscal action is "increasingly pressing".

Meanwhile, the Bank of England left interest rates at a record low of 0.5% for the seventh month running and said it would keep its 175 billion pound asset buying program in place, as expected.

Australian jobs rose more than expected 40,600 in August and unemployment fell 0.1% to 5.7%.

Standard & Poor's Investment Policy Committee raised its 12-month price target for the S&P 500 index to 1150 from 1100, and increased its exposure to global equities.

Alcoa said its third-quarter net earnings were $77 million, or 8 cents per share, compared with earnings of $268 million, or 33 cents per share in the same quarter of 2008. Wall Street had been looking for a loss. Alcoa, which has curtailed metal production by more than 20% and cut its workforce by about 30% since the economic downturn began a year ago, said there are signs that key markets are stabilizing and it expects global consumption to rise by 11 percent in the second half of this year.

PepsiCo (PEP) reported third-quarter core earnings per share of $1.08, vs. $1.06 core EPS (excluding items) one year earlier, as lower overhead costs, prior-year hedging losses offset a 1.5% drop in revenue. The soft-drink and food concern reaffirmed its 2009 guidance for mid-to high-single-digit core constant currency EPS growth off 2008's core EPS of $3.68. For 2010, the company targets constant currency EPS growth of 11%-13%.

A number of major retailers reported September sales results Thursday. A late Labor Day and delayed school openings offered some relief to merchants in September, according to an Associated Press report, helping to boost sales above Wall Street expectations. But spending still remains tepid as consumers focused on necessities amid job worries and tight credit.

Still, most stores posted sales declines -- though smaller than in recent months -- even as their figures are compared with last September when business plummeted as the financial meltdown ballooned. J.C. Penney Co. (JCP), Macy's Inc. (M), and teen retailer Wet Seal Inc. (WTSLA) reported smaller-than-expected declines in sales at stores open at least a year. The measure is considered a key indicator of a retailer's health.

Limited Brands (LTD), which runs Victoria's Secret and Bath & Body Works, and accessories chain The Buckle Inc. both posted increases for the month.

On the IPO front, shares of engineering services company Mistras Group (MG) made their public debut Thursday. The offering of 8.7 million shares priced Wednesday at $12.50 per share. Mistras initially indicated it would price its shares at between $14 and $16 per share.