Wall St. Optimism Levels Off
Wall Street rallied for most of the day Monday before giving up its early gains in late-afternoon trading.
Stocks returned close to their opening levels, but had shown signs of posting their fifth straight advance after reassuring comments from Federal Reserve Chairman Ben Bernanke and encouraging news from another big bank.
According to preliminary calculations, the Dow Jones Industrial average closed down 6.53 points, at 7,17.45.
Bernanke said Sunday that the recession would probably end this year if the government's efforts to revive the banking industry succeed, but he cautioned that the task would be difficult. In an interview with CBS' 60 Minutes, Bernanke said the government needs to get banks to lend more freely and financial markets to work more normally.
"The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis," he said. "But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time."
David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind., said Bernanke's comments gave the market a lift.
"Absolutely it's reassuring," Hefty said. "The American people look to these people for that hope."
Hefty said Bernanke's caveat that the end of the recession is predicated on the success of the government support for struggling banks is still a major question facing the economy and markets.
Bernanke's comments about a possible end to the recession and the need for a recovery in banking and lending were similar to but seemingly more optimistic than testimony he gave before Congress last month. Stocks bounced higher then, but in subsequent sessions plunged and took the Dow and S&P 500 to their lowest levels in more than a decade as investors succumbed to pessimism about the economy.
The market's tone has changed dramatically in the past week as better economic news - including word that Citigroup Inc. had operated at a profit in January and February - had investors betting that Wall Street had finally hit a bottom. The Fed chairman's comments Sunday helped reinforce the changing sentiment on the Street.
Wall Street also had good news Monday from Britain's Barclays PLC, which also disclosed that it has been performing well in 2009. Last week, both Citigroup and Bank of America Corp., reported improving trends for January and February.
David Kelly, chief market strategist at JPMorgan Funds, said the comments from some of the world's big banks are causing investors to re-evaluate their expectations.
"The statements from banks are very encouraging," he said. "It's premature to talk about a turn in the economy but the stock market is priced as if the economy isn't ever going to turn around."
In late-afternoon trading, the Standard & Poor's 500 index lost 0.41, or 0.05 percent, to 756.14 while the tech-heavy Nasdaq composite index dipped 24.76, or 1.73 percent, to 1,406.74.
About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 901.8 million shares.
"We're starting to build a base here," said Douglas Kreps, a managing director at Fort Pitt Capital Group. He said that each day that goes by without disappointing news can help further strengthen the market's legs.
"Being able to go a week or more without bad news," is a good sign, he said.
Gains on overseas market also fed the advance in the U.S. Japanese financial stocks surged on reports that the government would bolster their capital, while British investors were reassured by the Barclay's news. Japan's Nikkei stock average rose 1.8 percent. Britain's FTSE 100 gained 2.9 percent, Germany's DAX index rose 2.3 percent, and France's CAC-40 rose 3.2 percent.
The KBW Bank Index, which tracks 24 of the nation's largest banks, surged 7 percent to 27.39. Shares of Citigroup rose 77 cents, or 43.3 percent, to $2.55. Bank of America gained $1.12, or 19.4 percent, to $6.88. JPMorgan rose $1.42, or 6 percent, to $25.17, while Wells Fargo rose $1.05, or 7.5 percent.
Chris Johnson, president of Johnson Research Group, noted that some short covering was still helping to boost the market, though not to the extent as it did at the beginning of the rally last week. Short covering occurs when investors who sold borrowed stock on expectations the market would fall are forced to buy shares to repay their debts.
Investors were able to shake off more weak economic data. The nation's industrial output fell for the fourth straight month in February, falling 1.4 percent and hitting the lowest level in more than 50 years of record keeping.
Momentum from last week's rally is carrying over to support Monday's trading. Hefty said gains are likely to continue into at least Tuesday.
"Investors have a stampede mentality," Hefty said. "They stampede in and they stampede out." He added that the current rally is probably not sustainable, and mostly just helping bring the market back to a range near the previous lows seen in November.
Bond prices fell Monday as investors gravitated toward stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3 percent from 2.90 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.23 percent from 0.20 percent late Friday.
The dollar mostly fell against other major currencies. Gold prices also fell.
Light, sweet crude rose 56 cents to $46.81 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 6.99, or 1.8 percent, to 400.08.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. Stocks returned close to their opening levels, but had shown signs of posting their fifth straight advance after reassuring comments from Federal Reserve Chairman Ben Bernanke and encouraging news from another big bank.
According to preliminary calculations, the Dow Jones Industrial average closed down 6.53 points, at 7,17.45.
Bernanke said Sunday that the recession would probably end this year if the government's efforts to revive the banking industry succeed, but he cautioned that the task would be difficult. In an interview with CBS' 60 Minutes, Bernanke said the government needs to get banks to lend more freely and financial markets to work more normally.
"The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis," he said. "But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time."
David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind., said Bernanke's comments gave the market a lift.
"Absolutely it's reassuring," Hefty said. "The American people look to these people for that hope."
Hefty said Bernanke's caveat that the end of the recession is predicated on the success of the government support for struggling banks is still a major question facing the economy and markets.
Bernanke's comments about a possible end to the recession and the need for a recovery in banking and lending were similar to but seemingly more optimistic than testimony he gave before Congress last month. Stocks bounced higher then, but in subsequent sessions plunged and took the Dow and S&P 500 to their lowest levels in more than a decade as investors succumbed to pessimism about the economy.
The market's tone has changed dramatically in the past week as better economic news - including word that Citigroup Inc. had operated at a profit in January and February - had investors betting that Wall Street had finally hit a bottom. The Fed chairman's comments Sunday helped reinforce the changing sentiment on the Street.
Wall Street also had good news Monday from Britain's Barclays PLC, which also disclosed that it has been performing well in 2009. Last week, both Citigroup and Bank of America Corp., reported improving trends for January and February.
David Kelly, chief market strategist at JPMorgan Funds, said the comments from some of the world's big banks are causing investors to re-evaluate their expectations.
"The statements from banks are very encouraging," he said. "It's premature to talk about a turn in the economy but the stock market is priced as if the economy isn't ever going to turn around."
In late-afternoon trading, the Standard & Poor's 500 index lost 0.41, or 0.05 percent, to 756.14 while the tech-heavy Nasdaq composite index dipped 24.76, or 1.73 percent, to 1,406.74.
About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 901.8 million shares.
"We're starting to build a base here," said Douglas Kreps, a managing director at Fort Pitt Capital Group. He said that each day that goes by without disappointing news can help further strengthen the market's legs.
"Being able to go a week or more without bad news," is a good sign, he said.
Gains on overseas market also fed the advance in the U.S. Japanese financial stocks surged on reports that the government would bolster their capital, while British investors were reassured by the Barclay's news. Japan's Nikkei stock average rose 1.8 percent. Britain's FTSE 100 gained 2.9 percent, Germany's DAX index rose 2.3 percent, and France's CAC-40 rose 3.2 percent.
The KBW Bank Index, which tracks 24 of the nation's largest banks, surged 7 percent to 27.39. Shares of Citigroup rose 77 cents, or 43.3 percent, to $2.55. Bank of America gained $1.12, or 19.4 percent, to $6.88. JPMorgan rose $1.42, or 6 percent, to $25.17, while Wells Fargo rose $1.05, or 7.5 percent.
Chris Johnson, president of Johnson Research Group, noted that some short covering was still helping to boost the market, though not to the extent as it did at the beginning of the rally last week. Short covering occurs when investors who sold borrowed stock on expectations the market would fall are forced to buy shares to repay their debts.
Investors were able to shake off more weak economic data. The nation's industrial output fell for the fourth straight month in February, falling 1.4 percent and hitting the lowest level in more than 50 years of record keeping.
Momentum from last week's rally is carrying over to support Monday's trading. Hefty said gains are likely to continue into at least Tuesday.
"Investors have a stampede mentality," Hefty said. "They stampede in and they stampede out." He added that the current rally is probably not sustainable, and mostly just helping bring the market back to a range near the previous lows seen in November.
Bond prices fell Monday as investors gravitated toward stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3 percent from 2.90 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.23 percent from 0.20 percent late Friday.
The dollar mostly fell against other major currencies. Gold prices also fell.
Light, sweet crude rose 56 cents to $46.81 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 6.99, or 1.8 percent, to 400.08.
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Posted by scb1111_1 at 3:22 PM : Mar 16, 2009
SOS Different day
http://davidgoldsmith.com/wordpress/?p=1486
Thank you for any helpful advise during these dark economic times."
sockpuppet4
Save your coins, because they are not worth much today, but will at least have historical value in the future.
And buy wine.
Lots of it.
Because it is our only comfort today.
ST
"We became victims of our own crime."
SearingTruth, 2002
A Future of the Brave
I have a question.
I dont have any investments or equity but the economy still has my attention.
I do own a one gallon gallo wine bottle full of dimes nickles quarters and pennies.
I was thinking of taking it to the supermarkets coin machine when I go shopping friday but I am having second thoughts now.
I kind of need the bottle because the loose change in my pocket is getting a little heavy and I have no other place to put it.
Heres my question.
Should I cash in the coins and start refilling the bottle again, or, should I put the full bottle in the back of the garage so as to buy a house one day, and just buy another gallon of wine.
Thank you for any helpful advise during these dark economic times.
That's why they are so scared of deflation, cos it's means lower prices i.e less debt -- this debt is their vice that enslaves us achieved by the inflation of prices.
Therefore benny will print like there is no tomorrow to re-inflate."
jimahc
Indeed.
Capitalist economies are self correcting, unless some other entity steps in to stop that correction. In which case a lot of money is thrown down a dark hole until there is no money left to throw, and the economy corrects itself anyway.
It's as if a damn has broken, and instead of fleeing the water we keep building our cities higher in hope of escape.
Even as we are washed away.
ST
"Fellow citizens,
There is no catastrophic financial crisis demanding that we abandon our Constitution and become socialist.
Indeed global trillionaires stand to lose a few trillion because of their own greed and both political parties bribery to let them run wild, and if someone will just give it to them like complete idiots of course they're going to take it.
And we are indeed in a recession and may fall into depression, but giving those who have led us here $700,000,000,000 would be like paying someone to shoot you in the head once again to make sure you're dead.
But if we don't submit to their extortion everything will continue just as usual, although some may have to do away with a mansion or two. And of course whatever recession or depression already upon the way will arrive."
SearingTruth
A Future of the Brave
With wall street it is mostly the speculators and skimmers. Hedge funds and players.
If we would make a law or rule or something. Like if you invest in a stock you have to keep it a couple of days. That would go a long way in stabalizing our economy. If you sell a stock you cant buy the same stock again for a few day.
Lets rid our country of the repubuplican inspired greed and get our values back. I am optimistic. But that optimism needs some action.
That's why they are so scared of deflation, cos it's means lower prices i.e less debt -- this debt is their vice that enslaves us achieved by the inflation of prices.
Therefore benny will print like there is no tomorrow to re-inflate.
Until prices are brought into line with wages we will have no economic recovery.
This means that a falsely valued $750,000.00 home will have to be brought down to its real value, $75,000.00.
And all the governments of the world pouring all the cash taxpayers of the world have left into an effort to sustain false prices will fail.
That's why socialism, communism, and fascism have always failed.
Because their economic, as well as humanitarian, models do.
And there is no better recipe for disaster than corporate capitalism on the way up, accompanied by corporate socialism on the way down."
SearingTruth, September 2008
A Future of the Brave
I believe the financial data is not as bad as the market price would indicate.
I believe most of the problem is the negativity that is surrounding the markets now days.
Until the public feels the economy is ok, they will continue to run around saying the sky is falling.
Our politicians that claim the sky IS falling do not help the matter.
The average joe out there was saving less than 1 percent last year. Now they are saving over 5%.
When folks finally do realize that stocks are underpriced, they are going to invest with a vengance. This of course will cause the market to soar upwards past its real value, but the smart will get out once they realize they have made a good profit. The less than smart will continue on their irrational exuberance, just as they did with the tech market and the housing market.
When something is too good to be true - then it probably is too good to be true. Don't get greedy and you won't get hurt.
But, for the time being, the public is looking for a leader that shows optimism. President Obama is not showing that role, for whatever reason.