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Stocks rally on good news for banks, GM, retailers
Madlen Read The Accociated Press
Issue date: 3/13/09 Section: News
NEW YORK (AP) - Investors have been clamoring for months for a bit of good news. On Thursday, they got a load of it.
The Dow Jones industrials shot up 240 points, bringing its gains over the past three days to 622 points. It was the index's biggest three-day jump since last November.
This week's rally got an extra dose of adrenaline after an accounting board told Congress Thursday it may recommend a let-up in financial reporting rules for troubled banks in three weeks. Upheaval in the banking industry has been dogging the market since 2007, and hope that banks might finally get relief in how they value their bad assets spurred a flurry of buying.
"We might find that the banks are not as bad, or not bad at all, if these assets are marked differently," said Doreen Mogavero, president of the New York floor brokerage Mogavero, Lee & Co.
Better-than-expected retail sales figures also helped stocks, as did positive news from four Dow companies: Bank of America Corp., General Electric Co., General Motors Corp., and Pfizer Inc.
Bank of America's CEO told reporters his bank was profitable in January and February. Citigroup Inc. triggered this week's rally Tuesday with similar remarks.
Meanwhile GE's credit rating was cut by less than expected, GM said it will not need a $2 billion loan it previously requested from the government, and Pfizer reported a successful cancer drug trial.
"How all this turned around in a week, I don't know," said Scott Bleier, president of CreateCapital Advisors. "But it's certainly a better outlook than how it looked two weeks ago."
No one is calling the end to the selling on Wall Street. The economic picture is too uncertain, and much of this week's rally has been driven by technical factors. One of those factors is traders' inclination to buy stock to cover "short" bets, or bets that a stock will fall.
But it's been the most reassuring week in months for the stock market. The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, has jumped 11.2 percent over the past three sessions. That's a paper gain of $900 billion.
The Dow Jones industrials shot up 240 points, bringing its gains over the past three days to 622 points. It was the index's biggest three-day jump since last November.
This week's rally got an extra dose of adrenaline after an accounting board told Congress Thursday it may recommend a let-up in financial reporting rules for troubled banks in three weeks. Upheaval in the banking industry has been dogging the market since 2007, and hope that banks might finally get relief in how they value their bad assets spurred a flurry of buying.
"We might find that the banks are not as bad, or not bad at all, if these assets are marked differently," said Doreen Mogavero, president of the New York floor brokerage Mogavero, Lee & Co.
Better-than-expected retail sales figures also helped stocks, as did positive news from four Dow companies: Bank of America Corp., General Electric Co., General Motors Corp., and Pfizer Inc.
Bank of America's CEO told reporters his bank was profitable in January and February. Citigroup Inc. triggered this week's rally Tuesday with similar remarks.
Meanwhile GE's credit rating was cut by less than expected, GM said it will not need a $2 billion loan it previously requested from the government, and Pfizer reported a successful cancer drug trial.
"How all this turned around in a week, I don't know," said Scott Bleier, president of CreateCapital Advisors. "But it's certainly a better outlook than how it looked two weeks ago."
No one is calling the end to the selling on Wall Street. The economic picture is too uncertain, and much of this week's rally has been driven by technical factors. One of those factors is traders' inclination to buy stock to cover "short" bets, or bets that a stock will fall.
But it's been the most reassuring week in months for the stock market. The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, has jumped 11.2 percent over the past three sessions. That's a paper gain of $900 billion.
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