Wells Fargo Profits Drive Wall. St. Surge
The Dow Jones industrial average jumped nearly 250 points and major market indexes logged their fifth straight week of gains. Markets are closed for Good Friday.
Investors have been grasping at any sign of improvement in the crippled banking industry, and Wells Fargo's report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.
"It certainly tends to indicate that maybe we've gotten through the worst of the financial debacle in terms of the earnings and the worst fears," Eugene Peroni, senior vice president at Advisors Asset Management, told CBS News.
The Dow rose 246.27, or 3.1 percent, to 8,083.38. It was the blue chips' first close above the 8,000 mark in nearly a week and the highest finish since Feb. 9. The Dow hadn't logged five straight weekly gains since Oct. 2007, the stock market's peak.
Broader stock indicators also rose sharply. The Standard & Poor's 500 index rose 31.40, or 3.8 percent, to 856.56. Like the Dow, it was the highest close for the S&P 500 since Feb. 9.
The Nasdaq composite index rose 61.88, or 3.9 percent, to 1,652.54, its highest finish of the year. In 2009, the index is up 4.8 percent.
For the week, the Dow rose 0.8 percent, the S&P 500 rose 1.7 percent and the Nasdaq added 1.9 percent.
The report from Wells Fargo injected a decisively upbeat tone into the market after three days of choppy trading earlier this week, when the market appeared to be taking a breather after barreling ahead more than 20 percent in March. Analysts see occasional pullbacks as signs of a healthy market as investors allocate money carefully instead of just following a frenzied crowd.
"We are seeing some improvement in investor confidence and in turn, we're also seeing some improvement in consumer confidence. So I think that will probably be reflected more in the numbers as we go forward," Peroni told CBS News.
Bank shares had been sluggish this week following worrisome forecasts from key analysts about the bad loans they still carry on their balance sheets and other long-term woes. Major banks begin reporting first-quarter profits next week.
Wells Fargo jumped 31.7 percent Thursday and several other major banks also barreled higher, including Bank of America Corp. up 35.3 percent; JPMorgan Chase & Co. up 19.4 percent, and Citigroup Inc., up 12.6 percent.
Investors appeared unfazed by uneven monthly sales reports from retailers and mixed economic news.
Wal-Mart Stores Inc. reported lower-than-expected sales in March, sending its shares down 3.7 percent, making it one of only three stocks to fall among the 30 companies that make up the Dow.
Target Corp. rose 6.1 percent after posting results that topped expectations, while teen clothing retailer Abercrombie & Fitch Co. slid 3.5 percent after its numbers came in weaker than expected.
In economic news, new jobless claims fell more than expected last week, but those continuing to receive unemployment benefits set another high. The total number of laid-off Americans receiving unemployment rose to 5.84 million from 5.75 million, the most on record since 1967 and more than analysts expected.
The jump in stocks comes at the end of a relatively quiet holiday week, when markets will be closed for Good Friday. Investors grew more upbeat Wednesday on reports the government will provide support for battered life insurers and as two major homebuilders, Pulte Homes Inc. and Centex Corp., announced plans to combine.
Ted Aronson, a partner at Aronson-Johnson-Ortiz in Philadelphia, said Wells Fargo's upbeat preview into its earnings could place a greater burden on banks reporting results next week. Wells Fargo doesn't report its full results until April 22.
"I'm not sure everyone will be as successful, but we'd like to hope that the success will spill over," Aronson said.
In other trading, the Russell 2000 index of smaller companies jumped 20.46, or 4.6 percent, to 462.58.
About six stocks rose for every one that fell on the New York Stock Exchange. Volume came to 783.8 million shares.
Treasury prices fell as the stock rally damped demand for safe-haven investments. The yield on the 10-year Treasury note rose to 2.93 percent from 2.86 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan's Nikkei stock average rose 3.7 percent following reports that the country's ruling party is seeking a stimulus package bigger than originally announced.
Britain's FTSE 100 gained 1.5 percent, Germany's DAX index rose 3 percent, and France's CAC-40 rose 1.8 percent.
© 2010 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. Investors have been grasping at any sign of improvement in the crippled banking industry, and Wells Fargo's report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.
"It certainly tends to indicate that maybe we've gotten through the worst of the financial debacle in terms of the earnings and the worst fears," Eugene Peroni, senior vice president at Advisors Asset Management, told CBS News.
The Dow rose 246.27, or 3.1 percent, to 8,083.38. It was the blue chips' first close above the 8,000 mark in nearly a week and the highest finish since Feb. 9. The Dow hadn't logged five straight weekly gains since Oct. 2007, the stock market's peak.
Broader stock indicators also rose sharply. The Standard & Poor's 500 index rose 31.40, or 3.8 percent, to 856.56. Like the Dow, it was the highest close for the S&P 500 since Feb. 9.
The Nasdaq composite index rose 61.88, or 3.9 percent, to 1,652.54, its highest finish of the year. In 2009, the index is up 4.8 percent.
For the week, the Dow rose 0.8 percent, the S&P 500 rose 1.7 percent and the Nasdaq added 1.9 percent.
The report from Wells Fargo injected a decisively upbeat tone into the market after three days of choppy trading earlier this week, when the market appeared to be taking a breather after barreling ahead more than 20 percent in March. Analysts see occasional pullbacks as signs of a healthy market as investors allocate money carefully instead of just following a frenzied crowd.
"We are seeing some improvement in investor confidence and in turn, we're also seeing some improvement in consumer confidence. So I think that will probably be reflected more in the numbers as we go forward," Peroni told CBS News.
Bank shares had been sluggish this week following worrisome forecasts from key analysts about the bad loans they still carry on their balance sheets and other long-term woes. Major banks begin reporting first-quarter profits next week.
Wells Fargo jumped 31.7 percent Thursday and several other major banks also barreled higher, including Bank of America Corp. up 35.3 percent; JPMorgan Chase & Co. up 19.4 percent, and Citigroup Inc., up 12.6 percent.
Investors appeared unfazed by uneven monthly sales reports from retailers and mixed economic news.
Wal-Mart Stores Inc. reported lower-than-expected sales in March, sending its shares down 3.7 percent, making it one of only three stocks to fall among the 30 companies that make up the Dow.
Target Corp. rose 6.1 percent after posting results that topped expectations, while teen clothing retailer Abercrombie & Fitch Co. slid 3.5 percent after its numbers came in weaker than expected.
In economic news, new jobless claims fell more than expected last week, but those continuing to receive unemployment benefits set another high. The total number of laid-off Americans receiving unemployment rose to 5.84 million from 5.75 million, the most on record since 1967 and more than analysts expected.
The jump in stocks comes at the end of a relatively quiet holiday week, when markets will be closed for Good Friday. Investors grew more upbeat Wednesday on reports the government will provide support for battered life insurers and as two major homebuilders, Pulte Homes Inc. and Centex Corp., announced plans to combine.
Ted Aronson, a partner at Aronson-Johnson-Ortiz in Philadelphia, said Wells Fargo's upbeat preview into its earnings could place a greater burden on banks reporting results next week. Wells Fargo doesn't report its full results until April 22.
"I'm not sure everyone will be as successful, but we'd like to hope that the success will spill over," Aronson said.
In other trading, the Russell 2000 index of smaller companies jumped 20.46, or 4.6 percent, to 462.58.
About six stocks rose for every one that fell on the New York Stock Exchange. Volume came to 783.8 million shares.
Treasury prices fell as the stock rally damped demand for safe-haven investments. The yield on the 10-year Treasury note rose to 2.93 percent from 2.86 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan's Nikkei stock average rose 3.7 percent following reports that the country's ruling party is seeking a stimulus package bigger than originally announced.
Britain's FTSE 100 gained 1.5 percent, Germany's DAX index rose 3 percent, and France's CAC-40 rose 1.8 percent.
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Do not believe a word you hear from the FED "hush hush banks let the American people think everything is better".
Posted by actornaught at 9:34 AM : Apr 10, 2009
9/11 was just another thing he inherited from Clinton.
The planning and preparations were under way on Clinton's watch. Including 9/11 pilots taking flying lessons here in the USA in 2000. That's Clinton's watch.
Sounds like you're the one spewing hate.
The Liberal/Progressives are shouting that Brack Obama's economic policies are starting to work and the economic "recovery" has begun.
The Neocon Fascist Nazi Republicans are shouting that it was actually the "throw money at them" economic policies of the former-Great Emperor Bush II and Hank "Old Baldy" Paulson that have created the "recovery".
Well, EVERYONE on my block has lost their job, including me, and I am not seeing any economic "recovery". WE are told that the job market won't turn around until LATE 2010!!!
What do we do in the meantime? Watch Corporate Financial America get profitable with our tax money while we lose our homes and starve????
At Least FDR created the WPA and handed everyone a shovel and told them to go dig ditches for $1 a day. Corporate America isn't even giving us a shovel to use! Maybe they are afraid we will use that shovel on some corporate executive's head!
HAIL OBAMA???
Posted by mooksie1 at 8:33 PM : Apr 9, 2009
Yes, that's exactly what Chrysler and the S&L's did after their bailouts.
They PAID IT BACK, plus interest. The government actually profited from those bailouts.
The Bush/Paulson bailouts were designed along the same lines. All the money is expected to be paid back, just like last time.
Obama's bailout, on the other hand, will NEVER be paid back. It is pure spending, and it results in pure debt for the taxpayers to pay back.
Obama himself admitted to this. When asked if there was any plan for the bailout recipients to repay the bailout money, he just grinned and shrugged and said, nope I guess not.
Then he went on a world tour and bowed to the Saudi king, and now he's back home lying and saying it didn't happen.
Posted by actornaught at 6:27 PM : Apr 9, 2009
Nice try. But Bush didn't double the national debt in his first two months.
Posted by jwind1 at 6:00 AM : Apr 10, 2009
No, he's stupid because he's a liberal.
And liberals blame EVERYTHING on Republicans.
Posted by jonesjep at 8:11 PM : Apr 9, 2009
They also aren't highlighting the executive retention bonuses at Fannie Mae and Freddie Mac.
Do a news search on "fannie mae" and read the 4/3 story about it.
After Barney Frank raised such a commotion over the AIG bonuses, his silence is deafening on the same bounses at Fannie and Freddie.
Posted by ppassit at 6:52 PM : Apr 9, 2009
Yes, we saw the exact same kind of wild fluctuations before the crash of 1987 and 2008.
The market fluctuated hundreds of points up and down from day to day, even though the price stayed about the same from week to week.
That's the signal for CRASH on the way.
The market did the same thing 1930-32. A crash, followed by slight recovery, followed by another crash. Over and over again for three years, until the market reached a low that was one-tenth of the peak.
Right now Obama is sitting where Hoover did. Hoover was in office through the entire three year period.
Let's see if Obama can do any better.
Posted by pensacola8-2009 at 8:29 PM : Apr 9, 2009
Gee, right up to that sentence, I thought you were talking about all the liberals who taunt and name-call and use profanity, without one shred of actual fact or logic to support their assertions.
Sort of like you just did.