Wednesday, May 6, 2009

Wall Street's No-Stress Party Continues

Stress? What stress? Whether banks need to raise more capital to remain solvent will be revealed tomorrow. Word leaked out today that Bank of America may need as much as $35 billion to meet a capital "shortfall" but that could not deter investors from bidding it and other stocks higher.

The Dow has dazzled many over the past few weeks and today got to within shouting distance of recording a 2000-point rise from the bottom reached on March 9. The "Industrials" need to reach 8547 to mark the rally at 2000 points.

Dow 8,512.28, +101.63 (1.21%)
Nasdaq 1,759.10, +4.98 (0.28%)
S&P 500 919.53, +15.73 (1.74%)
NYSE Composite 5,890.55, +119.79 (2.08%)

Some of the enthusiasm came from the April ADP Employment Report, which estimated that 491,000 jobs were eliminated from private payrolls during the month. That news reached the street prior to the open, and, as odd as this market has been when confronted with news, caused an immediate gap up and sell-off which pushed the Dow back to break-even shortly after 10:00 am.

Confronted with the prospect of stocks actually declining, the perma-bulls made sure to just keep buying at a torrid pace throughout the rest of the day, ensuring that the rally would continue for a 9th straight week.

Advancing issues decimated decliners, 4238-2283. New highs, however, failed once more to beat new lows, with the lows ahead for the day, 110-67. Volume was straight off the charts, with both the NASDAQ and NYSE recording one of the best trading days of the year.

NYSE Volume 1,876,341,000
Nasdaq Volume 3,016,188,000

Enthusiasm was a little more contained, though not by much in the commodity trading pits, where oil for June delivery was up $2.36 closing at its highest level in months, $56.38. Gold rose $6.70, to $911.00, while silver added 29 cents to finish at $13.71 per ounce.

Enjoy the bounce. Honestly, why fight prosperity? But don't let me hear a word about high prices and inflation. On that note, the dollar was down against all major currencies. That is the price we will all pay.

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