Don’t look now– but the S&P 500 is UP so far this year
We’re not saying the recession is over or anything– but the stock market has rallied in a BIG way in the last couple of weeks.
U.S. stocks rallied across the board Monday, and the broad Standard & Poor’s 500 turned positive for 2009 after readings of increased construction spending and pending home sales.
Bears had long contended that a slower rate of economic decline was no reason to buy stocks, so these positive numbers bolstered the bullish case for the stock market and an imminent recovery. The government reported that U.S. construction spending rose for the first time in six months during March as stimulus spending kicked in, while pending sales of existing homes rose 3.2% for the month.
The Dow Jones Industrial Average rose 214 points, or 2.6%, to 8427, its highest close since Jan. 13. The S&P 500 gained 3.4% to 907, for its highest close since Jan. 8, giving it a gain of 0.5% on the year, helped by gains in all its sectors. Economically sensitive sectors led the way, with financial stocks up 10%, basic materials stocks up 5.6% as a group, and consumer discretionary up 3.4%.
One Wall Street trader said the market was suggesting that most money-centered banks would “earn their way out” of the crisis, no matter what the government’s stress test results are.
“A lot of people are getting caught short here,” said Joe Kinahan, chief derivatives strategist at brokerage thinkorswim. “I find it hard to believe we’re going to break through 900 on the first attempt.” There are “a lot of sellers lined up there,” Kinahan said. “We went through 870 (where many traders had anticipated a pullback) like a knife through butter.”
Let’s keep it going!