S&P 500 Back in Positive Territory

The S&P 500 rallied hard yesterday, outpacing the Nasdaq, and managed to close above its year-end 2008 levels (903.25). That puts the index in positive territory for the year (+0.44%) for the first time since January 8th.

Here is a quick summary of yesterday's action:

• Wall Street extended recent gains, driving the S&P 500 above 900 and allowing the index to wipe out its loss for the year.
• Better-than-expected economic reports and positive analyst comments were the catalysts for the advance. March pending home sales posted their first back-to-back increase in almost a year, while construction spending ended a sixth month slide.
• Commodity producers rallied as China’s manufacturing expanded for the first time in nine months and the price of oil hit a five-week high.
• Intel (INTC) led the technology group higher following an analyst upgrade. The shares rose 82 cents to 16.66.
• Financial stocks rose as the market anticipated banks have avoided the worst case scenario. Bank of America (BAC) denied a report it was trying to raise $10 billion and shares closed up 1.68 at 10.38.
• On the earnings front, Sprint Nextel (S) reported a surprise profit and the shares jumped 33 cents to 5.00.
• The Dow closed up 214.33 points at 8426.74.
• NYSE volume totaled over 1.7 billion shares.
• The S&P 500 was up 29.72 points.
  The Nasdaq gained 44.4.
• Advancing issues beat decliners by 5-1 on the NYSE and by 7-2 on the Nasdaq.
• The 10-year Treasury note was steady to yield 3.16%.

Comments

[Prudent Man...:]

Have our economic problems been solved? Did I miss something.? There was a lot of confidence a year ago as in early 2000. So what?

As the record of economists and security analysts is terrible, we must use are own knowledge and experience. I have been in this game for a long time and maintain my cynicism as the ability of the stock market to discount anything is a Wall Street Myth propagated by the stock peddlers.

If you want in, stick with strong fundamentals and don't chase the market.

May 05 09:35 AM

[Valley Boy:]

The next market bottom sounds interesting as a reasonable
buy-in opportunity: the euphoria of this rally would be
worked through, more of the economic fundamentals would be
dealt with, there will be some actual positive circumstances
occuring here and there in some sectors, we will be closer to the bottom of the recession, some more debt will be paid off, the
market is still way below its highs of more than a year ago.
I second the notion of not chasing this rally.

May 05 11:21 AM

[AndrewBaker:]

I agree with both the above, and cry softly to myself when considering how shorting financials has hurt recently. Much as I want the overall economy to improve for us all, I am waiting for my chance to get something back. I would like to do it with longs, but talk can't keep this market up forever, and going long now would simply add to the woes when the drop comes, as it will do soon ...

May 05 12:19 PM