WALL STREET >>> DJIA Adds 81.36 Points on Basel Reforms, China Data

Bulls embarked on a day-long buying spree; Focus on banks & China data

Wall Street started a historically gruesome week on a positive note today, as traders cheered increased clarity on financial reform and positive data from a key emerging market. On Sunday, the Basel Committee on Banking Supervision outlined new capital rules for banks that were less stringent than some market-watchers feared. Additionally, the group decided that lenders have until 2019 to meet the new standards, eliminating concerns about a mad rush to raise capital by major banks.

Meanwhile, China reported a 13.9% climb in industrial production last month, defying expectations for a slowdown. Against this backdrop, stocks surged higher out of the gate, and maintained healthy gains right into the close.

"What has me intrigued is the action in the CBOE Market Volatility Index (VIX)," said a Wall Street dealer. VIX futures are pointing to expectations for a huge increase in volatility over the next few months -- and the contrarian takeaway is that volatility is going to sink lower," he explained. "The current action in the VIX and VIX futures reminds me of last summer -- a time when no one wanted to own the market, which we all know now was actually a great buying opportunity."

The Dow Jones Industrial Average (DJIA – 10,544.13) ended the day on a healthy gain of 81.4 points, or 0.8%, as 24 of its 30 components trekked higher. Microsoft (MSFT) and Alcoa (AA) paced the advancing blue chips, while McDonald's (MCD) set the tone for the six lagging equities.

Thanks to today's jump, the Dow ended a second consecutive session north of its 200-day moving average -- and settled above 10,500 for the first time since Aug. 10.

The S&P 500 Index (SPX – 1,121.90) fared even better than the Dow, tacking on 12.4 points, or 1.1%, to finish above its 200-day trendline for the first time since Aug. 10.

Finally, the Nasdaq Composite (COMP – 2,285.71) racked up the day's biggest percentage gain, climbing 43.2 points, or 1.9%. Just like the SPX, the COMP wrapped up the session above its 200-day moving average for the first time in more than a month.

Crude Light

Crude futures were buoyed by strong Chinese data today, as commodity players applauded a monthly increase in industrial production for the rapidly growing oil consumer. Ongoing supply woes also acted as a bullish catalyst for crude, with Enbridge declining to provide a timeline for the restart of its leaking 670,000-barrel-per-day pipeline. By the close, crude oil for October delivery was up 74 cents, or 1%, at $77.19 per barrel -- marking a one-month closing high for the contract.

GOLD Futures
Despite a solid session for the stock market, gold futures eked out a small win today. While announcements out of Basel and China eased some macroeconomic worries, traders seemed unwilling to sell gold just yet. Gold for December delivery ended on a gain of 60 cents, or 0.05%, at $1,247.10 per ounce.

HAPPY TRADING