CLOSING BELL

Dow 10544.13  +81.36,  Nasdaq 2285.71  +43.23, S&P 1121.90  +12.35 

Stocks traded higher today on news that Basel III would not be as restrictive as some thought and the European Commission raised their forecast for GDP growth in the Eurozone.

The new Basel III regulations state that banks will now be required to have common equity equal to at least 4.5% of assets and regulators plan to introduce an additional buffer of 2.5%. If a bank does not meet the second requirement, the company cannot pay dividends, and will not be forced to raise cash. The required Tier 1 capital ratio will be at least 6%. Lenders will have eight years to fully comply with the new standards.

Additionally, The European Commission raised their forecast for Eurozone GDP growth from 0.9% to 1.7% in 2010.  Most of the change in the forecast is due to Germany’s economy.

The news sent the KBW Bank Index up +3.0% for the day.

Also seeing nice gains today was the Philadelphia Semiconductor Index which rose +3.4%.

In today’s trading nine of the ten major sectors posted gains, with only Consumer Staples posting a loss of -0.1%.

Overall volume was light with less than one billion shares being traded.  The light volume could be due to traders taking a wait and see approach to the market to see if the rally will continue.  Since the beginning of September the market has risen +7%.

Advancing Sectors: Financials +2.3%, Tech +2.1%, Materials +1.6%, Consumer Discretionary +1.1%, Industrials +1.1%, Energy +0.6%, Telecom +0.4%, Utilities +0.4%, Health Care +0.1%
Declining Sectors: Consumer Staples -0.1%