This week the market seems to be looking up, even with the highest unemployment rate in 26 years. From Fox Business:
The Dow Jones Industrial Average gained 39.51 points, or 0.50%, to 8017.59, the S&P 500 rose 8.12 points, or 0.97%, to 842.50 and the Nasdaq Composite picked up 19.24 points, or 1.20%, to 1621.87. The consumer-friendly FOX 50 added 4.61 points, or 0.73%, to 632.18.
Led by solid gains for financial stocks such as Morgan Stanley (MS: 24.08, 0.95, 4.11%) and a Research in Motion (RIMM: 59.29, 10.2, 20.78%) inspired tech rally, the markets proved once again to be resilient in the face of the latest dreary economic reports. The end result sent the Dow to its highest closing level since Feb. 9.
In addition to a new report showing the U.S. lost nearly 700,000 jobs in March, the markets withstood data indicating the U.S. service sector contracted further in March. Yet traders cheered the fact that the latest dreary numbers weren’t significantly worse than Wall Street was already bracing for.
“It was more of a confirmation of consensus than it was a shot over the bow. And that was what the market wanted,” said Peter Kenny, managing director at Knight Capital Group.
Friday’s rally underscored how much Wall Street sentiment has improved in recent weeks amid beaten-down stock prices, new government actions and glimmers of hope emerging the housing and manufacturing sectors of the economy.
“It’s pretty shocking. At this point the bulls have control. They are taking any news and spinning it positively,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, N.J. “But I personally think the rally is bumping up against some serious resistance. People have to be careful. They are getting a little too bullish.”
It doesn’t get much more bullish than the last four weeks on Wall Street. The Dow has surged more than 21% over that span, its best four-week win streak since soaring 31% in 1933.
“I think the market is really speaking to a degree of confidence in the overall number of projects, initiatives and coordination” taken by the government, said Kenny, citing the government’s “five-headed” approach rather than any single program.
More than two-thirds of the Dow’s 30 members closed in positive territory on Friday, led by financial giants Bank of America (BAC: 7.55, 0.34, 4.72%), Citigroup (C: 2.81, 0.08, 2.93%) and JPMorgan Chase (JPM: 29.15, 1.03, 3.66%). Drug makers Merck (MRK: 26.49, -0.5, -1.85%), Pfizer (PFE: 13.55, -0.22, -1.6%) and Johnson & Johnson (JNJ: 52.18, -0.77, -1.45%) took tumbles.
Boosted by Research in Motion’s better-than-expected quarterly results and outlook, the Nasdaq Composite rose more than 1%, pushing further into the green for 2009.
In Europe, London’s FTSE 100 fell 2.31% to 4029.67 while Germany’s DAX rose 0.07% to 4384.99 and the Paris’ CAC 40 sank 1.11% to 2958.74.
In Asia, Japan’s Nikkei 225 gained 0.34% to 8749.84 while Hong Kong’s Hang Seng rose 0.16% to 14545.69. China’s Shanghai Composite fell by 0.23% to 2419.78.